By Matthew Santoni

Law360 (August 17, 2020, 5:26 PM EDT) -- A Pittsburgh-area school district says its bus company is refusing to provide transportation for the upcoming academic year unless the district pays off a $2.2 million bill for services in the prior school year cut short by the COVID-19 pandemic.

The McKeesport Area School District said it paid Pennsylvania Coach Lines Inc. $1.6 million for the bus service it provided up until Pennsylvania Gov. Tom Wolf ordered schools closed on March 13 because of the pandemic. But the bus company insisted that it be paid for the remainder of the year or it would not provide services for the upcoming one, and it refused to provide paperwork the district needed to seek state funding, the district alleged in a motion for a preliminary injunction Friday.

"Defendant is now refusing to provide this information prior to the district making payments and is now claiming that the district has breached its contract, thereby trying to hold the school district hostage by refusing to provide transportation services for students once the 2020- 2021 school year begins," the motion said.

McKeesport Area School District is asking the Allegheny County Court of Common Pleas for a preliminary injunction compelling Pennsylvania Coach Lines to honor its agreement to provide student transportation in the 2020-2021 school year and to submit the forms the district wants. The bus company responded Monday with counterclaims that the district was using the pandemic as an excuse to duck its contractual payment obligations.

According to the district's motion, Pennsylvania Coach Lines provided student transportation for 128 days of the 2019-2020 school year before the coronavirus closures hit, which the school district calculated was worth $1.58 million of the $2.2 million transportation contract.

Pennsylvania enacted Act 13 later in March, which included provisions that said districts could renegotiate transportation agreements "to ensure contracted personnel and fixed costs, including administrative and equipment, are maintained during the period of school closure," the motion said.

McKeesport said that in order to keep getting paid as though the pandemic hadn't happened under Act 13, transportation contractors needed to provide documentation showing they had maintained the employment of their drivers and other staff. But Pennsylvania Coach Lines wouldn't provide such documentation to the district, McKeesport said.

"Upon information and belief, the defendant refused to provide this information because it laid off all of its workers upon the closure of schools by Governor Wolf," the motion said. "Upon further information and belief, the defendant now seeks payment in full of the 2019-2020 bulk rate even though it has not been compensating its employees or acting to ensure that its buses and vehicles were maintained during the closed portion of the 2019-2020 school year."

The district filed a complaint Aug. 12, seeking a declaratory judgment that it was the bus company, not the district, that had breached their contract. It filed the motion for a preliminary injunction Friday.

Pennsylvania Coach Lines said that because McKeesport had breached its contract, the bus company would not provide service for the upcoming school year, which resumes Aug. 26, the district said. According to McKeesport's website, the student body will be split in two, with half attending classes in the morning and half attending in the afternoon.

"Unless the district bends to the will of defendant and pays the disputed amount owed in contravention with Act 13, there will be no transportation services provided when school begins … This creates an emergency for the school district because in less than two weeks it will start school and some students will have difficulties attending because they have no other means of transportation besides utilizing a school bus," McKeesport's motion said. "The school district seeks preliminary injunctive relief to continue transportation services until the matter is decided on its merits."

McKeesport also said that without certain forms the bus company was withholding, the district could not get state reimbursement for about half of its transportation budget for the 2019-2020 school year. An email from Pennsylvania Coach Lines' attorney — Ray Middleman of Eckert Seamans Cherin & Mellott — to the district's solicitor said the company would not release the forms until it was paid for the rest of its contract.

Middleman told Law360 that the company's transportation agreement with McKeesport was a bulk-rate contract and could not be prorated, even with the pandemic. The response filed Monday denied the district's claims that the company had laid off workers.

"PA Coach had — and continues to have — buses and drivers on stand-by, ready to continue busing services at any given moment, as it is required to do under the transportation agreement," the response said. "The district, on the other hand, refused to continue making its monthly fixed payment to PA Coach as of April 2020, despite having contractually agreed to bear the risk of its transportation needs changing or becoming obsolete."

Middleman said it was the district that had to show the state it was continuing to pay its school bus drivers or contractors as though the pandemic hadn't canceled in-person classes, not the contractors.

"Act 13 did not provide the district with authority to renegotiate the transportation agreement between the parties, much less dictate new conditions of payment or contract rates," the response said. "Even if it did provide such authority, the district did not utilize it because the parties did not renegotiate the transportation agreement. Act 13 is inapplicable in this instance."

Counsel for the school district did not immediately respond to requests for comment Monday.

The McKeesport Area School District is represented by Krisha A. DiMascio and Joseph R. Dalfonso of Dodaro Matta & Cambest PC.

Pennsylvania Coach Lines is represented by Ray F. Middleman of Eckert Seamans Cherin & Mellott LLC.

The case is McKeesport Area School District v. Pennsylvania Coach Lines Inc., case number GD-20-008633, in the Court of Common Pleas of Allegheny County, Pennsylvania.

--Editing by Haylee Pearl.

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