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Bethlehem Area School District v. Diana Zhou

March 19, 2012


The opinion of the court was delivered by: Ditter, J.


This matter presently involves a contract provision that proceedings before a mediator be kept confidential. I conclude that the contract was breached, claimant Diana Zhou's motion for summary judgment must be granted, she is entitled to nominal damages of $1, and at trial she may present evidence of actual damages.


This dispute is a sideshow to a suit in which the Bethlehem School District contends that the defendant, Diana Zhou, abused the processes provided by the Individuals with Disabilities Education Act ("IDEA") in connection with the district's programs and plans for her son, M.Z.*fn1 Among other things, the district charges that Zhou has a pattern and history of requesting repetitive and excessive due process hearings and improperly sought unnecessary interpretation services in an effort to drive up costs so that the District would pay to place her son in private school.

Before the present suit was filed, and in an effort to resolve a part of their many then-existing disputes, the district and Zhou agreed to mediation using the services of the Office of Dispute Resolution under its Mediation Rules for Special Education ("Mediation Rules") and an Agreement to Mediate.

The Mediation Rules is signed by Zhou, three District representatives, and the mediator. It begins by noting that "parties and participants need to agree to abide by the same rules, otherwise mediation cannot be productive" and sets forth eleven points for agreement. Those points include: "To share educational or relevant family information openly;" "That discussion during the mediation is confidential;" "That the mediator will not be called as a witness in future legal proceedings."

Each party and the mediator separately signed identical copies of the Agreement to Mediate. Above the signature of each party, it states:

I am choosing to pursue mediation in an effort to reach an agreement on some or all of the issues regarding special education for the student. . . . If an agreement is reached, I understand that the signed agreement/contract is not confidential. I understand that discussions during the mediation session are confidential and will not be used during subsequent proceedings. I, therefore, agree not to call the mediator as a witness in future proceedings pertaining to the student's case.

The District alleges in its present complaint that Zhou "advised the Mediator that the [sic] she was engaging in due process procedures to drive up costs for the District so that the District would agree to pay for M.Z. and J.Z. to go to private school." Am. Compl. ¶ 168. The District then "called William Haussmann as a witness regarding [Zhou's] statements of intention to 'drive up costs.'" District Opp. To Zhou's MSJ on Breach of Contract Counterclaim ("Dist. Opp.") at 12.


Zhou asserts that the Mediation Rules and Agreement to Mediate are contracts, that the District breached these contracts by repeating a statement made by Zhou during a mediation proceeding in its complaint and by calling the mediator to testify in this case, and that she has suffered damages as a result of the breach. The District argues that Zhou's motion for summary judgment should be denied because: (1) the agreements are not contracts; (2) the mediation was nullified because Zhou refused to participate; (3) this court already found that Zhou's statement is not protected; and (4) she cannot establish damages. The District also argues that the mediator can be called at trial and Zhou's statement is admissible because there are no enforceable confidentiality agreements.

1. The Agreements Constitute A Contract Between the District and Zhou

The District argues that the documents are not contracts because they do not create a relationship between the District and Zhou and they do not evidence an intent to enter into a written contract pursuant to the IDEA. Dist. Opp. at 6-7. The District does not cite to any law in support of its assertions.

"In general, to determine whether a contract was formed under Pennsylvania law, a court must look to: (1) whether both parties manifested an intention to be bound by the agreement; (2) whether the terms of the agreement are sufficiently definite to be enforced; and (3) whether there was consideration." Century ...

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