ServiceMaster Management Services, an Illinois company hired to supervise Little Rock School District's maintenance and custodial staff.
IN THE UNITED STATES DISTRICT COURT EASTERN DISTRICT OF ARKANSAS WESTERN DIVISION LITTLE ROCK SCHOOL DISTRICT, ET AL PLAINTIFFS V. NO. LR-C-82-866 PULASKI COUNTY SPECIAL SCHOOL DISTRICT. ET AL DEFENDANTS LORENE JOSHUA ET AL INTERVENORS MOTION TO ENJOIN THE LRSD FROM ENTERING INTO A SERVICE CONTRACT WITHOUT FOLLOWING BIDDING PROCEDURES, REQUESTS FOR INFORMATION AND WITHOUT PRIOR INVOLVEMENT OF THE JOSHUA INTERVENORS The Joshua Intsr/eoors respectfijlly move the court to enjoin the Little Rock School District from entering into a management service contract regarding managerial services for custodial and maintenance services. For cause, the Joshua Intervenors respectfully show the court that 1. The Little Rock School District has not discussed the proposed management services contract with the Joshua Intervenors
2. The proposed management contract has potential adverse racial effect and impact 3. The proposed management contract has not been let for bids and is not a part of the program, research and evaluation instrument for the next five years
4. The proposed management contract has potential adverse monetary effects upon ftnandai resources of the district and has the potential for adversely affecting the ability of the school district to meet its desegregation obligations
and 1 5. length and was designed to provide special favor to someone, a John Doe, in toe school district The Joshua ir^ervenors request an opportunity to engage in discovery and to have this matter set for hearing shortly thereafter. The matter will be presented to the Little Rock School Board this evening, August 31, 1995, for action. Timo is therefore of the essence. WHEREFORE, the Joshua Intervenors respectfully request that this court reserve the right to review, and cancel, if necessary, any contract which is entered into between the Little Rock School District and any management service contractor, unless said contract is let tor bids after the discussion process has been followed which involves the Joshua intervenors. Respectfully submitted, JOHN W. WALKER, PA 1723 Broadway Little Rock, Arkansas 72206 (501)374-3758 in W. Walker, Bar No. 64046 2:5ATg OP SERVICE I, John W. Walker, do hereby certify that a copy cf the foregoing pii forwarded to ail counsel of record, by il.S. Mail, post^ prepaid, on this August, 1995. was y of 3 I ->i iiefji Assemnlv 193 3 ACl 01 100'5 ft 1 1995 Ottice oi Desesf^ataxi Moniiorina \V A 1 t 3 KI 1 ) b a 3 9 10 11 12 13 14 15 15 17 18 19- 20 t 23 24 -w act to B'cqOIRE THE SOUCITIX OF BIOS I?-a* COMOITY TO BE SCKOOt DIBTB^CT HAScM.ESTlHATEO PUKCE.XSE PEtCE ? .CHASSD 3Y A r.ruS'S." 3- n iNACTED 3Y THf : assz-sly Q7 i.T : s  43 F aRK.i2<S/iS : ION 1. Definition. Board of Directors (A) "Purchasing Off of any school dist icC or a la' 13i" shall near. .'.a lly designated age of the school district with authority to contract or behalf of the school district. . (3) "Commodities" shall laean aake purcha.ses all supplies", goods, MCerial, equip- , meet, machinery, facilities, personal property, and services, other than and pr^ssional se^ces school district. , purchased for or on behalf of the (0) Purchase Price" shall nean Che full sale or bid price 0 --ponuBod-iy,  , without any allowance for trade-in. 'Purchase" shall mean and include not only the outright purcnase of a conmodicy whe the but also the acquisition of commodities under rental-purchas or lease-purchase agreements or any other type of agreements rental payments on the purchase price thereot. by a. () 'Open Market Purchases" shall mean ,os purchases or c
jdi ties /y purchasing SECTION 2. official in which competitiv All purclunses - bidding is not required qS commodities by any school district. 26 27 23-  :o' except those spccifiea lly exempted by Section 3, shall be made as folic' I I (A) In each instance In which Che estiaaeed pu- ^.-ba8e price shall erj^- cvo-chgus.ind-dollars ($2,000) thif commodity shall be procured : <rnHcitiirr- bids'. orowided c.bat the purc.bas 'J rus/ and rs u the by r.egcz a irtg a co.icracc. zejecz * Z-*-e T 1 rJ I 'T J pp I 6
: (}  1 I !2 13 14 15 a. t Pv t.Jf.V  i I 16 .n
j7 i Ivbx. cl-.nr ' n ch- into i r vs L r T vitho-dt solicit and unavoidable cxi be aoproyedj by ths att.nrhcd o the IT*.,-- i  l purcha.^e df jsuc.h t. (2) toi 1'. a 1? iii t, C: dcJiar# ($2,000). P CSC* xoeh >.1^ the pur n s-tt tc rbv hereinafter listed co-raaoditics  bid.s: r.ency. S C (A) Comnioditics i Provided, ' ths superintende r.stancss of r.o S'. h crser u rsscer. '.cy purchase s
. c, unless a statenen: in writ chose order deocribinr. he et seniy ncce rodity without cosnrtifivc biddinf. s available onlv fro.-a the fedcial Rover : sh in" t by 182 r 12 ^23 sc: pt" r-S 24 :b*' 1.0$. (c).Siuciirc: state sgaoc
. (D) Usetd. 071 S-Ssl' a4 1   II . isorvices,-the rates ' for wiiich or a"federal regulatory agency ar.d :::acnineii.  subj co r h -Tlie Doa'rd'of Directors'of each school district shall pre ibe--che'"nieclioc of soliciting bids by regulation and aay adept other 4' .riles.and rcgula >26' .1. ons governins the procurenent of corrxodities. SEC^XzSSy^AJyl olaf i?n%
orr 'che^pcevisi6hs\_ofTthis'Act shall be a .if I .29 * :i^-sjceanor '.S' ' '' -1 - ' . .w * SECTION 6, 1 - 30 Uiercfiy'Trepcalcd . ' k. V*  3 J 32 33 3r a- 11 laws and parts of'laws in conflict with this Act art .a n   tirfS- : n * /s/ Oobbtj Tullis f -V-' 3 3jAPPR0VED VS rG.Or.V-AEaRNNO'iaR -2- IN THE UNITED STATES DISTRICT COURT EASTERN DISTRICT OF ARKANSAS WESTERN DIVISION LITTLE ROCK SCHOOL DISTRICT PLAINTIFF VS . NO. LR-C-82^^0g|V'^^ PULASKI COUNTY SPECIAL SCHOOL DISTRICT NO. 1, ET AL DEFENDANTS SEP 8 1995 MRS. LORENE JOSHUA, ET AL KATHERINE KNIGHT, ET AL Office of Desegregation Monitoring INTERVENORS INTERVENORS LRSDS RESPONSE TO JOSHUA INTERVENORS MOTION TO ENJOIN THE LRSD FROM ENTERING INTO A SERVICE CONTRACT WITHOUT FOLLOWING BIDDING PROCEDURES. REQUESTS FOR INFORMATION AND WITHOUT PRIOR INVOLVEMENT OF THE JOSHUA INTERVENORS ("LRSD" The Plaintiff, Little Rock School District or "District") , for its Response to Joshua Intezrvenors Motion to Enjoin the LRSD from Entering Into a Service Contract Without Following Bidding Procedures, Requests for Information and Without Prior Involvement of the Joshua Intervenors, pursuant to the Federal Rules of Civil Procedure, states: The LRSD denies the allegations made by the Joshua Intervenors in their Motion to Enjoin the LRSD from Entering Into a Service Contract Without Following Bidding Procedures, Requests 1. for Inf ozmiation and Without Prior Involvement of the Joshua Intervenors. 2 . The LRSD does hereby assert that this Court hold the Joshua Intex-zenors to strict proof of each and evezry allegation made by them in their Motion to Enjoin the LRSD regarding the <lara\pcud/en)oi n.res -1-proposed entry into a management service contract regarding custodial and maintenance services. 3 . As of this response, the LRSD has not yet entered into any contract with any entity to provide managerial services for custodial and maintenance services. However, the board of directors of the District, on Thursday, August 31, 1995, did vote to authorize the administration of the District to negotiate terms and conditions of such a contract and to enter into the contract upon the completion of those negotiations. 4 . The Joshua Intervenors have stated no basis to permit discovery and the request to review a contract negotiated and entered into in the day-to-day operation of the District is unprecedented and without support in the law of this case or other controlling authority. WHEREFORE, the Little Rock School District respectfully requests that this Court deny the Joshua Intervenors Motion to Enjoin the LRSD From Entering Into a Service Contract and award the District all of the legal and proper relief to which it may be entitled. Respectfully submitted. FRIDAY, ELDREDGE & CLARK Attorneys at Law 2000 First Commercial Building 400 West Capitol Little Rock, Arkansas 72201-3493 (501) 376-2011 ATTORNEYS FOR PLAINTIFF LITTLE ROCK SCHOOL DISTRICT Jerry L. Malone {Bar No. I. D. 85096) dianavpcssd/enjoin.res -2-CERTIFICATE OF SERVICE I, Jerry L. Malone, do hereby certify that a copy of the foregoing LRSD's Response to Joshua Intervenors Motion to Enjoin the LRSD from Entering Into a Service Contract Without Following Bidding Procedures, Requests for Information and Without Prior Involvement of the Joshua Intervenors has been served by U. S. '7^ Mail, postage prepaid, on September J_, 1995, upon the following: Mr. John W. Walker JOHN W. WALKER, P.A. Attorneys at Law 1723 Broadway Little Rock, AR 72206 Mr. Samuel M. Jones, III WRIGHT, LINDSEY & JENNINGS Attorneys at Law 2200 Worthen Bank Building 200 West Capitol Little Rock, AR 72201 Mr. Stephen W. Jones JACK, LYON & JONES, P.A. Attorneys at Law 3400 Capitol Towers Capitol & Broadway Streets Little Rock, AR 72201 Mr. Richard W. Roachell ROACHELL & STREETT Attorneys at Law First Federal Plaza, Suite 504 401 West Capitol Avenue Little Rock, AR 72201 Mrs. Ann Brown Federal Monitor, Office of Desegregation Heritage West Building, Suite 520 201 East Markham Street Little Rock, AR 72201 Jerry L. Malone Jiana\ocss<l/en)oin.ra -3-LITTLE ROCK SCHOOL DISTRICT 810 WEST MARKHAM STREET LITTLE ROCK, AR 72201 September 22, 1995 TO: Board of Directors FROM: Fred L. Smith, Manager, Support Services THROUGH: Henry P. Williams, Superintendent SUBJECT: Proposed Agreement with ServiceMaster the District and the proposed agreement between comments, please call Attached is . . ServiceMaster. Should you have any questions or me at 324-2009.management services agreement , 199 5 , by and Liule Rock school Dlsrrict. (me -School ) WITNESSETH: RECITALS
operates various departments A. which provide services in support of the that the B. i. is -- vSTa ci Xrnvtament for sodenu, suff and public and that d,= materials, supplies and equipment used by^such^employees m . be well trained and managed to C. D. materials, supplies in the discharge of their responsibilities he of the oroper quality and quanuty
 School that ServiceMaster has extensive faculties and in providmg certam of the i------- materials and supplies needed by such departments
The School wishes to certain of its support departments and management services for the School. obtain the management services of ServiceMaster for ServiceMaster desires to provide such NOW, THEREFORE, in consideration of the foregoing and the terms and conditions set forth below the parties agree as follows: 1. INTRODUCTION TheSchool hereby retains ServiceMaster as e ,,eeXiv^^SSS^ces'2:X\se^tlon2andtonulma,a^^^^^ .he school agrees to pay The School the for the efficient performance of such managemem the consideration therefor C provided in section 6
and ServiceMaster accepts as piuviutu ______ rnakp available such employment and responsibilities and equipment, all as set forth herein. bv ServiceMaster. The prograin of 1 -2 Information Provided hvU^der h^^^v^^lnped based on management services which ServiceMas r independent on-site survey and investigation iufor^dou provided by me &hoo and u^^^^ ,nd mmrviews ^b _____ImaaAXactfar 30 inSDCCtlOn 0l DUUUlUg, ^,4 has been developed based on bv ServiceMaster, an inspection DY OCl V IVCivxttJvw*., r administrators, principals and suff of schoo . 2. SERVICES . ServiceMaster agrees to train, manage and direct die Schoorlemp^S^seSarunents of School hlch are idendried tn secuon Agreement Page 1and direction together with 3.2 below (the .-Service Such <mlmn^^ X  and deUiont .of d. Physi^-- the i^ the administrative services related thereto (the "Management ServiceMaster in the context of ServiceMasters duties of Servce Employees Agreemen. b, descriptions and duties------ , as are set forth in the Exhibits attached hereto and reference. (b) The Management Services shall be provided to those departments for which an Exhibit number appears in the following table
Department Support Services Function Exhibit Custodial Plant Operations and Maintenance Grounds Grounds Equipment A A A B ServiceMaster agrees that it will perform ^1 the etnploymeX^u Service Employees by the school as directed by die Seto bT "L" Rnlafed Administrative Services. ^ch relate to the employment records and furnishing to the School the data from regular payroll for the Servicw Employees should the School so desire gxnense provide and maintain all 2.3 10.111101 Material^. Service-Master will, at   ' daUy work and project Management Service related traimng equipment,^ manuals used to train the schedules, indices, standard opetano^ PX- ,tooronetty of ServiceMaster. schedules, indices . such materials sh^ _at^^_t^- at its sole expense, ruQuired for the lawful renderins
ofj^^Mmgeto Service Employees. -------- 2.4 Permits and Licenses: Compliance with Laiv all licenses and permits which are i _ procure Services and are applicable to ServiceMaster agrees to comply with aU statutes the conduct of its services and sales hereunder . , ordinances and regulations which 2.5 Costs operating costs (a) ServiceMaster shall pay all direct The term "direct To Be .Ahso^^^d bv ServiceMaster. htcuned ,^.n wi^ the athibuuble m the costs as used in the preceding sentence jjgt mciuuc uiuac of e Manageniem Semces^^^^^ foUowirig
d m below, me lenu contributions (i.e., worker s y. -1-: . -3, benefits -d employment-ml^^^^^ (U) aU taxes compensation, unemployment,
Xr\ocIu^^^^^^ connec^on wi e provision and fees currently unposed by fede^, suk^or loca^au _ of the Management Services, and (in) tra g costs which are to (b) The followmg costs are not direct p zn wages and. all related, payroll be paid by ServiceMaster as provided m costs or contributions (includm mxLof^tviceEmployeclothing cu^ndy operating costs does not include those provision < items listed in paragraph (b) below costs: (i) salaries, taxes in connection with the provision taxes or ocivius. uniforms or other special ciuuuub all to (.btomnance expenses for equipment owned by *e School provided to Agreement Page 2which is made available to ServiceMaster as provided in Section 5
(iv) repair and maintenance Section 10
(v) materials and supplies nf fhp snace orovided to ServiceMaster pursuant to  ... P -  (vi) payroll and employment forms and documents (such as time pursuant to Section 4,2(d)
and, cards, time sheets, application forms, evaluation forms, etc). 3. PERSONNEL . , ServiceMaster Personnel, (a) ServiceMaster agrees 3.1 to furnish no less than five (5) coordinatmg managemem blSb^ shall be a coordinating manager, who shall be ServiceMaster s wi.h the performance of ServiceMaarers powers daues proper performance One of such persons and duties under ^^bUraddition to me management personnel. ServiceMaster will famish all necess^ (b) In addition to p,jects personnel as required for the supervisory, training and efficient performance of the Management Services. emnlovees of fc) All of the personnel described in paragraphs (a) and (b) will be employees or federal, sure or local sumte in connection wi eir employment. (d) If any ServiceMaster management, supervisory, personnel are not acceptable to training, technical or special projects 'ieJuperintendent of e Schoofor his or her designee, such of such personnel. Upon the receipt by reXSerTsucharrZ(5ervT^^^^^^ will provide w.thin Employees on dre dam of dais to be employees of the School as opposed to 3.2 .School Personnel, (a) All persons who were Agreement shall continue ServiceMaster and all persons employed by School as shall be employees of the School. All such persons a reasonable time a Service Employees after e date of this are subject to discipline, job Agreement shall be employees o uxc ovixuvu polices procedures, stamtes action and discharge by the School pursuant to applicable practices, polices, p and oer laws. (b) ServiceMaster shall not be regarded as a party to or agreements to which the School was or becomes a party any collective bargaining agreement ServiceMaster will, upon request by me school, SsX^eXMas:
agrees established policies and procedures. cprvice Emnlovees and the School (d) The School shall pay all wages and salanes of the Service Employees anu shall pi all payroll and other taxes, fees, and other =^g!Vc^'^nlovees r.^. or'fmml Stamms relating to the employment of Ifa^loyees injured levied or required by, federal, state or local statutes relating to shaU pay all workers compensation insurance. Any claims . The SchoolWhile working under die dhection and supeivision of ServiceMaster shaU be handled by to . School. (e) The School agrees to furnish to ServiceMaster, upon request, certificates of u^rance evidence of the proper employee insurance coverage lo, the Seri ice Employees and Ser^IcXter agreesm furnish to School certiflcams of insurance as as to furnish to insurance coverage for evidence of proper employee insurance coverage for the employees of ServiceMaster, including, but not limited to. workers compensation insurance. 4. MATERIALS AND SUPPLIES 4.1 7rUe olthis Section. This Section 4 aUocates the respoi^ibilities of the parties for  and supplies which are requued in t---------- . the furnishing of the materials performance of the Management feXX colinon sePfonh in parugrHph (a) toeof is not connection with the sub-section to dus Section 4 is noc apptable satisfied, the sub-section shall be considered as deleted from to ^..^le only if the Management Services 4.2 Custodial, (a) This Secuon .- ph schools custodial department. to be provided hereunder include services wi reexpendable supplies referred   Ld:srn^d:dtc*" SeXTSSaSe To to Ssmdi^ Depawhent is toiuded materials tjiis paragraph (b) are owned as of the appi.....w CprviceMaster oursuant to tjus paragrapn to
and upon .nnination of to Agreement any inventory of and supplies shall be delivered to School. unused materials and supplies snail oe ucuvc... - . _ ?,^^^l^L.^"TXMaster a Certficate of Tax Exemption upon e taxes, the School shall furnish to ServiceMaster a commencement of the Management Services. School agrees to provide, at its own expense (d) , the expendable supplies, as such may be defmed by agreement 0 sIZmss eiand Uhil, required drcounecdouwidithe ope ot SKViceMasBi ____ ,0) of the Schools Custodial department. towels, deodorants, washroom soap. Such expendable supplies include (but are nlastic container liners, and paint. toilet tissue, paper towels, aeoaorauu, waoxa....- > section 4 ' ' " ' 4 T, Plant Operations and Maintenance., (a) This ion 4.3 shall be applicable only if the Management Services to be provided hereunder include services with respect to Schools plant operations and maintenance. its own expense, all plant operations and maintenance " (b) The School shall provide, at its own expense, ai up...---------- supplies, materials, repair parts, oily if the Management Services 4.4 Ground, (a) This section 4.4 shall department. to be provided hereunder mclude services supplies, materials, repair (b) The School shall provide, at its own expense, an grounu^ pp (b) parts, and purchased services. owned by ServiceMaster 5. equipment ServiceMaster AU equipment now ServiceMas^ 5.1 Equipment Provided by Serviceiviaster. \j
cervices (including computer and used in connection with the tende^ o e am ServiceMaster shall be hardware and software) shall remam to property of ServiceMaster. Agreement Page 4responsible for the repair, maintenance and replacement of such equipment, at no additional cost to the School. This section 5.2 shall be > "7 Pniiinment Provided bv the School. Custodial. ( ) applicable'oiif if the Management Services to be providS hereunder include services 5.2 Equipment (b)hoolS"rSkXta^^^^^ use by ServiceMaster the =quipm owr^by die school and used in the custodial the shall remain the property of e ^erv.^ maintenance of the equipment. cKrndial denartment shall be provided and ^^u^^SVs^'SeMSS ^Threost of such additional or replacement equipment has been mamumed by ServiceMaster, rue e hv <berviceMaster oursuant to this h(bns XTby teshool S'ditional amounts to (e paid m ServiceMaster rdJ^Xio7Xs%reem^^^^^^^^ Equipment purchased hereunder shall e ^0 c^rviceMaster the unamortized book value exceed five years. School is not obligated to pay  not S Sc^S'XTaSte^a^yTay" by ServiceMaster the equipment owned by purchased by ServiceMaster pursuant rather than to ServiceMaster. . 5 t rniiiriiir? - Bv P' Ooeranota secticnk^S sgS^SSS^ and Maintenance, (a) This the Schools plant operations and maintenance. services with respect to the School s piam operjuvw operations and -rh Qz'hnn! aarees to oemut ServiceMaster to utuize me prcsciu piau*- k- (b) The School agrees to p^t equipment in an operanve, maintenance service equipment. The School a rees mai mainuin such equipment in an operative, of additional or replacement maintenance service equipment. Thiq section 5 4 shall be operable, workable and safe School shall maintain such equipment, at its expose in^^Zquipntent condition. The School shall be respoi^ible, at i^ (including replacement parts). ServiceMaster P paid in fiiU, date of this Agreement, grounds equipment, *p P described in Exhibit B. The equipment so ServiceMaster at the termination of -T-n____i qmniinK to be paid to servicciviaaiti <. of its purchase this Agreement being The only additional amounts to be paid to----- the unamortized book value of said equipment. . - - its useful life, not to exceed tive years. Equipment purchased hereunder stall be amortaed by ru^Xolr value of any equipment School Is not Obligated to pay to J" equipment not desiied by School School does not desire  ServiceMaster has not paid the complete shall be transferred to berviceiviasLci. Agreement Page 5amount owed on the additional equipment at the time the Agreement is terminated, the School may make any payments pursuant to this sub-section directly to the entity owed, rather than to ServiceMaster. 6. COMPENSATION 6.1 Schools Agreement to Pav Contract Amount. In consideration of the performance by Service.Master of the Management Services and in consideration of the transfer of the materials and supplies by Service.Master to the School in connection with the performance of the Manaaement Services, the School agrees to pay to ServiceMaster, at the times set forth in section 6.3, the Contract Amount as set forth in section 6.2. 6 Contract Amount. Subject to adjustment as provided in subsequent sections of this Section 6 the Contract ^Amount shall be S98.659.00 per mon. If the Management Services commence on a dav other than the first day of a month, or if the Management Services terminate dav other than the last day of a month, the Contract .Amount for the first or the last month on 3. dav other than the last nay or a muiiui. me vuuudvi Amuuuu tvi wx  shall be prorated on the basis of the number of days within such first or last month on which Management Services were provided. It is agreed that of the SI. 183.908 to be paid annually^ to ServiceMaster pursuant to this Agreement, ServiceMaster will meur not less than an average for materials, supplies and equipment to be used in its of S329,347 expense per year for matenals, supplies ana equipment lu uc uocu m performance of the terms and conditions of this Agreement and title to such material, supplies and equipment will be solely in the name of School. On or before each annual anniversary date of this Aareement, ServiceMaster shall provide invoices. contracts or other written documenution satisfactory to School evidencing that at least an average of 3329,3^1 has been expensed by ServiceMaster toward the purchase of materials, supplies and equipment. 6.3 'payments of the Contract .Mnount. (a) Commencing on October 15, 1995, and on the fifteenth of each month thereafter, the School shall pay to ServiceMaster the Contract Amount. . . , (b) If any payment of the Contract Amount is not paid in full withm fineen days or the due date, the unpaid portion shall bear interest at e highest rate allowed by the laws of the State of Arkansas. Further, School shall pay all costs and reasonable attorneys fees incurred by Service.Master (not to exceed 10% of the amount awarded) in collecting amounts due to ServiceMaster from the School. 6.4 Adjustment of the Contract .Amount: Base Wage Increase. On each anniversary of the commencement of services hereunder, the Contract Amount (excluding custodial and pounds capital equipment, computerization and vehicles) shall be increased by die percenta.ge mcrease that the base, waae rate of the Service EmnloveeTot School have mcreased for the previous _ twelve (12) month period not to exceed 2.5%in any given year. Base wage rate is Qefmed as the rate otcompensauon paid to service employees wmch shall include the annual raise approved or authorized for the Service Employees of School. This amount does not mclude any annual step increase or increment given for an additional year of service with the School. 6.5 Adjustment of the Contract Amount: Change in Services. The Contract A^unt has been established on the basis of the area, job descriptions and specific dunes descnbedm e Exhibits. If the total amount of area or the job descriptions or the dunes to be pertormea by ServiceMaster or the Service Employees is enlarged, reduced or altered m any shall be an increase or decrease, as the case may be, in the Contract Amount. Such adjustment Agreement Page 6 shall be effective with the first payment to be made immediately following such increase, reduction or alteration. In connection therewith, ServiceMaster and School shall negotiate in good faith and mutually agree upon any enlargement, reduction or alteration of the contract, amount. 6.6 ServiceMaster Guarantee. ServiceMaster guarantees that the Schools costs to perform services for the custodial, maintenance and grounds departments as set forth in Exhibit A attached hereto, including ServiceMaster annual fees, during each year of this agreement, shall not exceed the amount reflected in the applicable portions of the School s 1995-96 fiscal year budget for such period as reflected in Exhibit C. Should any payment to ServiceMaster for services provided cause School to exceed the budget as adjusted for fiscal year 1995-96, ServiceMaster agrees that the School shall not be obligated to make any payment(s) to ServiceMaster which would cause the School to exceed the amount reflected in the applicable Rather, the schools liability to portions of the Schools 1995-96 fiscal year budget. ServiceMaster for any remaining amounts owed pursuant to Section 6 would terminate, except to the extent hereinafter provided. As such, the School would not be obligated to pay ServiceMaster the total annual amount reflected in paragraph 6.2. However, should the School realize sufficient savinss in the applicable portions of the Schools budget such that the amounts for the 1995-96 school year is less an or equal to the applicable portions of the adjusted budget for the 1995-96 fiscal year, including the amount owed to ServiceMaster, the School shall pay ServiceMaster any remaining amounts owed under paragraph 6.2. It being the intent of the parties that the School shall not incur costs and expenses, including the amounts paid to ServiceMaster, in the applicable portions of the School s budget relating to maintenance and plant operations which would cause the School to exceed the amount budgeted for that area during the 1995-96 fiscal year. For instance, the Schools 1995-96 budget for custodians, mainrenancs and related matters is $10,779,986.00. The ServiceMaster projection for 1995-96 for these same arsas, including the annual amount in paragraph 6.2, total $10,621,136.00. If those projections are achieved, ServiceMaster would receive the compensation as provided by  ? this Agreement, assuming all other terms and conditions are met. Should the projections not be achieved, the School would not be obligated to pay ServiceMaster, to the extent the payment(s) would cause the School to exceed the $10,779,986.00 budgeted amount for the 1995-96 fiscal year as pro-rated for the nine (9) months of the shortened initial year. In subsequent years, the School would not be obligated to pay ServiceMaster, to the extent the payments would cause the School to exceed the baseline amount as adjusted pursuant to the provisions of this Agreement. To get the pro-rated baseline and actual amounts for the 1995-96 fiscal year, ServiceMaster and the School shall negotiate and mutually agree in writing within forty (40) calendar days after the October 2, 1995 commencement date. Management fees and amounts to be expended by ServiceMaster on equipment and supplies during the initial year will also need to be pro-rated, as necessary. Likewise, if the operational costs, exclusive of the amounts owed to ServiceMaster, exceed $9,596,086.00 ($10,779,986.00 minus $1,183,908.00), ServiceMaster must refund to the School, dollar for dollar, all such amounts already paid to Service Master which would cause the School to exceed the 1995-96 budgeted amount ($10,779,986.00). However, in no event would ServiceMaster be obligated to refund more than the management fee for the particular year (i.e., $854,561, which will be subject to proration during the initial year.) For example. Agreement Page 7 should the operational costs, exclusive of the amounts owed to ServiceMaster reach SIO.300,000 during the school year and the School has already paid ServiceMaster S640.917 (571,213 x 9), the total in this category so far would be 510,940,917. This exceeds the budgeted amount by 5160,931.00. As such, ServiceMaster would be required to refund 5160,931.00 to the School and not receive any payments remaining (571,213 x 3 = 5213,639), to honor its guarantee to the School. This same guarantee would apply for each year of this agreement, using the schools 1995-96 budgeted amount as the baseline. However, following the 1995-96 fiscal year, the wage and benefit portion of the baseline will increase each year by the base wage rate as defined in paragraph 6.4 plus any annual step increase or increment given for an additional year of service with the School. Likewise, the remaining portion including supplies, purchased services and utilities will increase each year by 1.5%.The amounts not paid from year-to-year, for which the School is not liable, may be determined by the School and ServiceMaster and recorded in a log. Thereafter, should the operational costs for the applicable portions of the Schools budget, including the amounts paid to ServiceMaster for the year in consideration, achieve sufficient savings (after all required services, supplies, equipment and other school needs for the year in question have been met), the School may pay Service.Master a portion of the amounts reflected in the log, but only to the extent such payment(s) (after determining the acnial expenditures for the year in question, including payments to ServiceMaster for the year in question) would not cause the School to exceed the applicable portions of the.baseline. Should such savings never be achieved during the term of this Agreement, the School would have no liability whatsoever to ServiceMaster for the amounts reflected in the log. Should ServiceMaster deem it necessary to request that certain expenditures be removed
ood faith, and mutually or adjusted to arrive at the actual expenditures for a particular year of this Agreement, upon request by ServiceMaster, ServiceMaster and School shall negotiate in g' agree upon any such adjustments. Notwithstanding any of the foregoing, including the possibility that ServiceMaster may either receive less than full payment of the amounts reflected in paragraph 6.2 during one or more years of this Agreement or that ServiceMaster may have to refund monies to the School should sufficient savings not be achieved, ServiceMasters obligation to perform management services shall not be reduced, abated or otherwise relieved as such constimtes a portion of the guarantee made by ServiceMaster to the School. No party shall have any liability to the other hereunder by reason of any delay or failure to perform any obligation or covenant including ServiceMaster guarantee if the delay or failure to perform is occasioned by force majeure, meaning any act of God, storm, fire, casualty, work stoppage, strike, lockout, civil disturbance, riot, war, national emergency, act of government, ' act of public enemy, or other cause of similar or dissimilar nature beyond its control. 7.1 7. INDEMNIFICATION . . 7.1 Tn.surance and Indemnification of the School. ServiceMaster agrees to indemnify and hold the School and its School board members, officers and employees harmless from any liabUity imposed against the School by reason of the negligent acts or omissions of ServiceMaster or its employees. ServiceMaster shall, at its sole expense, obtain and keep m force during the term of this Agreement, a policy of comprehensive public liability insurance Agreement Page 8 insuring ServiceMaster and School against any liability arising out of the negligent acts or omissions of ServiceMaster or its agents, representatives or employees. Such insurance shall be in an amount of not less than $1,000,000.00 for injury to or death of one person in any one accident or occurrence and in an amount of not less than $20,000,000.00 for injury to or death of more than one person in any one accident or occurrence. Such insurance shall further insure ServiceMaster and the School against liability for property damage of at least $20,000,000.00. The limits of said insurance shall not, however, limit the liability of ServiceMaster hereunder. If ServiceMaster shall fail to procure and maintain said insurance School may, but shall not be required to, procure and maintain the same, but at the expense of ServiceMaster. Indemnification of ServiceMaster. 7.2 The School shall indemnify and hold ServiceMaster and its parmers, directors, officers and employees harmless from any liability imposed against ServiceMaster by reason of the negligent acts or omissions of the School or its employees to the extent that the School is covered by insurance and to the extent that such is permitted by applicable law. Such insurance shall be in an amount of not less than $1,000,000 for injury to or death of one person in any one accident or occurrence and in an amount of not less than $3,000,000 for injury to or death of more than one person in any one accident or occurrence. Further, the school does not, by so agreeing, intend to waive any immunity or other defense to which it may be entitled. Therefore, to the extent such an agreement would jeopardize or otherwise interfere with the Schools immunity and other defenses, such indemnity provision becomes null and void. 7.3 Indemnification Regarding Asbestos. The School acknowledges its obligation to identify the presence, if any, of asbestos material on the Schools premises and its responsibility to appoint the Asbestos Hazard Emergency Response Act (AHERA) "Designated Person." ServiceMaster agrees to provide assistance to the School in the form of: (i) support service employee education and training material when ServiceMaster is responsible to train, manage and direct said employees
(ii) guidance in the form of Standard Operating Procedures for small- scale, short-duration operation and maintenance activities as defined by AHERA
and (iii) other support as determined by ServiceMaster to aid the School in its AHERA-related activities. School agrees that under no circumstance shall a ServiceMaster employee be or act in the capacity of the "Designated Person." School also acknowledges that ServiceMaster has no obligation hereunder to identify or take corrective action by removing or containing asbestos fibers for other than small-scale, short-duration operations and maintenance activities as defined by AHERA, nor does ServiceMaster have any duty to mitigate the hazards from exposure to asbestos fibers. The School agrees to indemnify and hold ServiceMaster harmless from any liability imposed against ServiceMaster, including costs and reasonable attorneys fees (not to exceed 10% of the amount awarded), by reason of the presence of asbestos material on the Schools premises or for any actions done or failed to be done by ServiceMaster while acting on Schools behalf related to AHERA. (This indemnity agreement is subject to the conditions, restrictions and limitations in paragraph 7.2.) 8. AGREEMENTS CONCERNING EMPLOYEES OF A PARTY 8.1 Agreements. At no time during the term of this Agreement and for a period of one year thereafter will either of the parties call upon any employee of the other party or persons who were employees of the other within the then previous twelve months, to employ, hire or Agreement Page 9 otherwise interfere with the contracmal relationships of such employees, without the prior written approval of the other party
nor will either party directly or indirectly, for itself or on behalf of or in connection with, any other person, firm, parmership, corporation, association or School, solicit, hire, employ or take away any such employee from the other party. The parties agree that this provision is for the protection of their respective legitimate business interests and is not intended to restrict the employment rights of individuals. 8.2 Remedies for Breach. If either party breaches the above covenant, the offended party shall have e right to apply to a court of competent jurisdiction for an injunction to restrain the offending party from employing such employee and for an order to enforce the terms of this section so breached, and the offending party shall be liable to the offended party for all reasonable attorneys fees, costs and expenses incurred by it to enforce the covenant. 9. TERM 9.1 Terms. The term of this Agreement shall be for a period of five years commencing on October 2, 1995. 10. SPACE AND OTHER ACCOMMODATIONS PROVIDED BY THE SCHOOL 10.1 Space and Utilities. The School shall provide ServiceMaster with reasonable offices, storage space and facilities on the Schools premises from which ServiceMaster will conduct the Management Services. Such offices and storage space shall be under the operational control of ServiceMaster. The provision of such space shall include all utilities (including water, sewer, electricity and local telephone service). Such space, local facilities and utilities shall be provided without cost to ServiceMaster. ServiceMaster will insure its interest in any property owned by it located on or about the office and storage space provided to ServiceMaster. ServiceMaster shall vacate the office and storage space upon termination of this Agreement. 11. MONTHLY JOINT REVIEW 11-1 Joint Review Committee. The parties shall form a Joint Review Committee consisting of at least two persons from the School and two persons from ServiceMaster. The Joint Review Committee will meet on a monthly basis for the purpose of reviewing ServiceMasters performance with respect to the Management Services and generally to review the results of operations under this Agreement in comparison with the expectations of e parties. 12. TERMINATION FOR NON-PERFORMANCE 12.1 Notice of Non-Performance
Grace Period: Termination. If one party (the "Offended Party") considers the other party (the "Offending Party") to have not performed one or more of its obligations hereunder, the Offended Party shall give the Offending Party a written notice which shall specify the nature of the alleged non-performance. The Offending Party shall then have sixty days from the receipt of such notice to remedy the alleged non-performance. If, at the end of such sixty-day period, the Offended Party considers the alleged non performance not to have been cured, the Offended Party may thereupon terminate this Agreement by giving the Offending Party a written notice of termination and, at the expiration of the thirtieth day following the delivery of such notice, the Offended Party shall be relieved from the further performance of its obligations hereunder. The parties understand and agree that the foregoing Agreement Page 1030-day period is to allow for an orderly transition from the Management Services as provided hereunder to an alternative service mechanism. 12.2 Termination by ServiceMaster Based on the Schools Failure to Pav the Net Amount Due. Notwithstanding the provisions of Section 12.1 and 6.3(b), ServiceMaster may terminate this Agreement upon ten days prior written notice if the School fails or refuses to pay ServiceMaster in accordance with e provisions of Sections 6.1, 6.2, 6.3(a) or 6.6. 12.3 Relationship to Section 8.2. This Section 12 shall not affect the covenants and remedies for breach thereof which are set forth in Section 8. 13. NOTICES 13.1 Form of Notice and Delivery. Any notice required or permitted under this Agreement shall be in writing and shall be delivered by certified or registered mail, wi proper postage prepaid If to ServiceMaster, to
ServiceMaster Management Services L.P. ServiceMaster Education Management Services One ServiceMaster Way Downers Grove, IL 60515 Atm: President If to the School, to
Little Rock School District 810 West Markham Street Little Rock, AR 72201 Attn: Superintendent In the event the date of actual receipt of any notice is not recorded, notices shall be deemed to have been received on the third day after post. 14. GENERAL PROVISIONS 14.1 Appropriation of Funds. In the event sufficient funds shall not be appropriated or made available for the funding of operations of e School and School has no funds legally available for the payments due hereunder from other sources, School and ServiceMaster shall review the services provided hereunder and the Contract Amount, in keeping with the then proportionate amount of appropriated funds for the services hereunder, and determine the level of services which can be performed and the method of delivery of such services to School within the level of appropriated funds. In the event ServiceMaster is not able to modify its program to meet the funds appropriated, either party may terminate this Agreement upon giving to the other thirty days prior written notice. 14.2 Severability. If a court holds any part, term or provision of this Agreement to be unenforceable, the validity of the remaining portions or provisions shall not be affected, and the rights and obligations of the parties shall be construed and enforced as if this Agreement did not contain the particular part, term or provision. Agreement Page 1114.3 Headings. The headings which appear in this Agreement have been inserted for the purpose of convenience and ready reference. They are not intended to, and shall not be deemed to. define, limit or extend the scope or intent of any provision hereof. 14.4 Entire A.greement. This Agreement (including Exhibits A, B, C and D as well as the Schools Business Case dated August 24, 1995, all of which are incorporated herein by reference as if included word-for-word) has been negotiated and prepared by and for the parties equally and shall not be construed as having been drafted by one party. When fully executed, it shall supersede any and all prior and existing. Agreements between the parties, either oral or in writing. This Agreement contains the entire agreement between the parties hereto wi respect to the subject matter hereof. 14.5 Amendments. Other than for amendments as provided in Section 6.4, any amendment or modification of this Agreement must be made in writing and signed by the parties. 14.6 Management Service ("Exhibit D\ A proposal detailing ServiceMaster Management Services has been submined. The said proposal becomes a part of this agreement and is attached hereto as Exhibit D. 14.7 Assignments. This Agreement is not assignable by either party without the prior written consent of the other party. 14.8 Choice of Law and Jurisdiction. This Agreement shall be governed by the laws of the State of Arkansas. The parties agree to submit to e jurisdiction of the courts within the State of Arkansas. 14.9 Attorneys Fees. Except as oerwise specifically provided herein, in any action brought in law or in equity based on this Agreement, each party shall be responsible for its own costs and attorneys fees. 14.10 Non-Waiver. No waiver of any default will be construed to be or constitute a waiver of any subsequent defaults. 14.11 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be a separate document but all of which constitute one and e same instrument. 14.12 Pending Litigation. Each of the parties agree that as of the date of the execution of this Agreement a motion to enjoin School from entering into this Agreement with ServiceMaster is now pending in the United States District Court, Eastern District of Arkansas, Western Division, styled Little Rock School District v. Pulaski County Special School District No. 1, et al., No. LR-C-82-866. Service Master does hereby release and forever discharge School from any and all actions, causes of action, damages, claims or demands which ServiceMaster may hereafter have, arising out of or in any way relating, directly or indirectly, from orders issued by the United States District Court which may terminate or modify this Agreement. School is under no obligation or duty to appeal any decisions of the United States District Court affecting this Agreement. Further, the Schools liability hereunder will be subject to the outcome (through either settlement, order of the Court or otherwise) of that litigation. Agreement Page 12IN WITNESS WHEREOF, the parties have executed this Agreement the day and year above written. VICEMASTER MANAGEMENT SERVICES oited Partnership iceMaster Management Services, Inc., General Parmer ration Management Services,-Genefal Piutun ATTEST tn L. ,an, President Assistant ^Secretary J FLE ROCK SCHOOL DISTRICT ATTEST By: Agreement Page 13 j I -  N -zV.: ' ?*' I -'k-a > I 2539-120 1199-140 FUND 12-2542-120 2542-120 i-'- J 2542-12) 2541-120 2648-120 . i 210+240 ABOVE EUNCPONS i| 400,500,600 OBJECTS 2641.2,4,5 8 FUND 12 SALARIES VO TECH SUBS MAGNET CUST SUBTOTAL MAINT SER AREA ASB SUBTOTAL TOTAL Sal BENEFITS TOTAL LABOR SUPPLIES CUST MAINT MAGNET total SERVICE MAS^ER 38,500.00 2,070.570.00 2,109.070.00 1,330.243.00 59.426.00 1,383.669.00 3.498,739.00 524,611.00 4.023.550.00 109.259.00 480.575.00 15,000.00 604,634.00 300 OBJECf'S 254),2,4,5 EXCEPT 321-323 PORCH SER 603,159.00  y ACTUAL 92/93 ACTUAL 93.'94 actual 94795 BUDGET 95/96 FUND 12 2542-322 2642-321 2542-323 UTILITIES MAG.NET ELECT GAS WATER TOTAL 2.734,075.00 695.425.00 189.150.00 3.618.650.00 SER MASTER 1 J83,90? ')' A granc total 10.034,101.00 88.836,24 234,152.52 335,694.82 2.478.062.48 3,136.895.86 1.167.691.67 240.065.11 70,950.0-' 1.478.706.79 4,615,602.65 772,168.72 5,387,771-37 73,894.57 214,602.38 360,957.42 2.596,523.16 3,245,977.53 1,098.482.35 205.943.88 46.375.69 1,351,401.92 4.597,379.45 686.91272 5,284,292.17 79,809.80 212,697.87 351,306.97 2,536,386,27 3,ie{),200.9l 1,095,302.11 200,742.96 54,635.05 1,350,630.14 4,530,881.06 672,824.34 5.203.705.39 85,149.00 200.000.00 ' 372.934.00 2,661,168.75 3,219.261.75 1.109,338.00 175,750.00 55,115.43 i ,S40.203.43 4,559.455.18 720,591.26 '5,280,046.44 < ( f. ~  . >I ' 230,287.22 5,008.90 235,296,12 222.016.52 0.05 222,016.52 364.98223 17,460.10 382.442.33 198,541.00 15.000. CO 213,641.00 r, r 693,329-20 981,615.29 991,931.86 1,035,999.00 507,373.00 5,232,084.12 ^*,209.77 1 3.82 3.46 J 10-71 9.78C 337.40 598,876.00 2,766,666.00 642,959.98 227,539.97 4.286,030.95 529,201.00 2,443,097.45 482,255.81 230,574.64 3.685,128.90 576,335.00 2.791.665.00 698,200.00 184,100.00 4,250.300.00 10.723,954.93 10.263,208.48 ia
779.986.44^ ) f OCT 2 6 1995 Office Of Desegregaccn moe: John w. Walker, pa. Attorney At Law 1723 Broadway Ltitle Rock. Arkansas 72206 Telephone (501) 374-3758 FAX (501) 3744187 JOHN W. WALKER RALPH WASHINGTON MARK BURNETTE AUSTIN PORTER, JR. October 24, 1995 Mr. Chris Heller FRIDAY, ELDREDGE & CLARK 2000 First Commercial Bank Building Little Rock, AR 72201 Dear Chris: I would like to depose the following persons beginning at 3:00 p.m. on Wednesday afternoon: Dr. Mr. Mr, Ms. Henry Williams Fred Smith Charlie Neal Linda Pondexter Ms. Judy Magness Mr. John Riggs Dr. Katherine Mitchell Each of the depositions should be relatively brief and will be focused upon the Servicemaster contract in anticipation of the Saturday hearing. If you do not agree, please let me know so that I may ask for an order from the Court requiring it. Ve: truly yours, ohn W. Walker JWW:js cc: Dr. Mr. Ms. Henry Williams Jerry Malone Ann BrownFSLED U.S. DISTRICT COURT EASTERN DISTRICT ARKANSAS UNITED STATES DISTRICT COURT EASTERN DISTRICT OF ARKANSAS WESTERN DIVISION OCT 5 1 1995 JAMt^ W. il^cCOfiMACK, CLERK DEP CLERK LITTLE ROCK SCHOOL DISTRICT PLAINTIFF vs. LR-C-82-866 PULASKI COUNTY SPECIAL SCHOOL DISTRICT NO. 1, ET AL DEFENDANTS MRS. LORENE JOSHUA, ET AL INTERVENORS MRS. KATHERINE KNIGHT, ET AL INTERVENORS ORDER On October 28, 1995, the Court conducted a hearing on a motion by the Joshua Intervenors to prevent Little Rock School District from entering into a contract with ServiceMaster. The evidence was not completed, and the hearing on this issue is now scheduled to continue on Friday, December 8, 1995, at 9:00 a.ra. IT IS SO ORDERED this I day of October, 1995. SUSAN WEBBER WRIGHT3 United States District Judge PHIS DOCUMEMT ENTERED ON DOCKET SHEET IN COMPLIANCE WITH RULE 53 AND/OR 79(al FRCP ON _ 25 5 2 I I i  i 1RECSs" S NOV 1995 Oice oi DeseyiC'aauon MOiiitCi OlJ IN THE UNITED STATES DISTRICT COURT EASTERN DISTRICT OF ARKANSAS WESTERN DIVISION FILED district COURT eastern district ARKANSAS NOV 2 1995 OEP CURK LITTLE ROCK SCHOOL DISTRICT Plaintiff, vs. PULASKI COUNTY SPECIAL SCHOOL DISTRICT NO. 1, ET AL. Defendants, MRS. LORENE JOSHUA, ET AL. V'- Intervenors, KATHERINE W. KNIGHT, ET AL. Intervenors. * * * * * * * * * *  * * * * * * * * * LR-C
82-866 Tr, MWWKZI W< ORDER With the Courts ruling from the bench during a heai ing on October 28, 1995, ServiceMaster Companys motion for leave to intervene (docket entry # 2547) is hereby granted. DATED this 1st day of November 1995. 'JUDGE mis DOCUMENT ENTERED ON DOCKET SHEET IN COMPLIANCEWITHRULE58 AND/OR79(a) FRCP ON BY 4 2 551 1.430/ 1 995 17:18 FROM JOHN W.URLKER P.R. TO 3710100 P . 02 1 X IN THE UNITED STATES DISTRICT-. CCf^, EASTERN DISTRICT OF ARKANSAS WESTERN DIVISION 1. LITTLE ROCK SCHOOL DISTRICT PIAZNTXFF VS, NO. LR<-82-866 PULASKI COUNTY SPECIAL SCHOOL DISTRICT NO. 1, ET AL DEFENDANTS MRS. LORENE JOSHUA, ET AL INTER KATHERINE KNIGHT, ET AL INTERVENORS Ths Plaintiff, SETTLEMENT Little Rock School District ("LRSD") or ("District") and the Joshua Intervenors ("Joshua"), by and through their respective undersigned counsel, respectfully settle, resolve and compromise any and all issues and disputes between the"!, pursuant to 11 14.12 of the Little Rock School District Management Services Agreement with ServiceMaster Management Services, L.P., (hereinafter referred to as the "Agreement"), on the following terms, conditions and understanding
1. The District, on the recommendation of the District's superintendent, Dr. Henry Williams, authorized Dr. Williams to negotiate and enter into a contract regarding its custodial and janitorial services with an entity known as "ServiceMaster Management Services, L.P.", Delaware limited partnership a (hereinafter referred to as "ServiceMaster"). <MceMirruLur -1-2. .F ft It .JOHN .U...U.R.L K E.R __ p.0 3 The terms of the authorization of the Little Rock School Board Minutoe recited in the determined at dated September 1, a meeting of the hoard of director. ' excerpt 1995, as held on Thur.day, Augu.t 31, of the Dietrict 1995. evidence at the hearing referred hereinbelow as Court's Exhibit No. The excerpt was admitted to in Paragraph Nos. 31. 3 . On August 31, 1995, Joehua filed States District Division, Case No. Court, Eastern District LR-C-82-866, entering into a contract to into 9 and 9 a motion in the United Of Arkansas, Western seeking to enjoin the District from provide janitorial and management services to the District. custodial The XtRSS Prow Satering into Joshua's Motion to Enjoin Bidding Procedures < A Service Contract Without Reguests For Following lavolveaient e The Joshua and Without Prior the w motion" or w Intervenors will be refsrrecl to heroin as pending litigation". motion are adopted herein by reference The allegations off the for-word. as if set out herein On September 7, 1995, word- Joshua's motion, reference as if The allegations of the District filed its response to set out herein word-for-word. that response are adopted by 4. On or about September 20, brief in support off its contained in the brief herein word-for-word. 1995. Joshua filed a memorandum 5. motion. The allegations and are adopted by reference The primary issues ^rief, among others, *MOBWTTUI,ur arguments aa if set out raised by Joshua in its motion and were that the proposed management services' 2- f I11/.30Z1995 17! 20 FROM JOHN U.WALKER P.O. TO 3710100 P. 04 contract had the potential to negatively impact the District's ability to carry out its desegregation obligations and that the District would be in violation of the laws of the State of Arkansas should it enter into the contract In the manner and under the terms proposed. 6 . The LRSO gave ServiceMaster, its agents and representatives notice of the Motion to Enjoin (referred to in the Agreement as the "pending litigation) prior to the data on which the Agreement was subsequently executed. ServiceMaster and the District acknowledged the pending litigation and the District's right to terminate or modify the Agreement through either settlement of the litigation, order of the Court, or otherwise. The Agreement was executed on September 20, 1995. 7, On October 28, 1995, this Court the Honorable Susan Webber Wright presiding, conducted a hearing on Joshua's motion. The hearing was recessed until December 8, 1995. 8. At the hearing on October 28, 1995, this Court allowed ServiceMaster to intervene in the proceeding. ServiceMaster was represented by attorneys, John Everett of Fayetteville, Arkansas, and Joseph Mowery of Little Rock, Arkansas. 9. At the hearing, Joshua began presenting evidence and testimony toward the two issues referred to hereinabove. Prior to > .recessing the hearing. this Court noted the presence of the superintendent and members of the board of directors of the . District in Court and the advocacy of the lawyers for the District <iHtfci0imsxrr -3- )11Z30Z1995 17!20 EBQM.JQHN .U.WALKER P.fl. TO 3710100. P. 05 in defending adherence to the Agreement. The Court further remarked that ita primary interest, notwithstanding the presence of other isauea of importance, concerned the potential for the Agreement to have an adverse impact on the District's ability to meet its desegregation obligations (l.e., its ability to fund and appropriate money for desegregation programs) and whether the laws of the State of Arkansas had been complied with in reaching the Agreement and the terms of the Agreement, This Court remarked that should the Agreement be found in violation of Arkansas state law, and the Court indicated that it probably was, the Court would then have to determine whether to require the District to go back through the selection process. However, this Court went on to note that if the contract does violate Arkansas state law, it is either void or voidable. Specifically, the concerns raised relate to Code  6-31-301, aS. US', which provides that all school districts in the  State of Arkansas are required to purchase commodities as defined therein through soliciting bids where the purchase price shall equal or exceed $5,000, Commodities are defined as all supplies, goods, materials, equipment, machinery, facilities, personal  property and services, other than personal and professional services, purchased for or on behalf of the school district, excluding school buses. A violation of these requirements constitute a Class ^C criminal misdemeanor offense. 10. Paragraph 14.12 of the Agreement providest AMMSMantALR' -4- A11^30/1995 17:21 FROM JOHN W.WALKER P.A. TO 3710100 Bach of the parties agree that as pending ILtiaation. of the date of the execution of this Agreement, a motion to enjoin school from entering into this Agreement-with ServiceMaster is now pending in the United States District Court, Eastern District of Arkansas, Western Division, styled "Little Rock School District v. Pulaski County Special School District No. 1, et al.", No. LR-C- 82-866. ServiceMaster does hereby release and forever discharge School from any and all actions, causes of action, damages, claims or demands which ServiceMaster may hereinafter have arising out of or in anyway relating directly or indirectly, from orders issued by the United States District Court which may terminate or modify this School is under no obligation or duty to Agreement. appeal any decisions of the United States District Court affecting this Agreement. Further, the School's liability hereunder will be subject to the outcome (through either settlement, -T ?.l~ otherwise) of that litigation. order of the Court or 11. In recognition of the serious coneems raised in the pending litigation through Joshua's motion
the evidence and testimony presented at the hearing on October 38, 1995
the P . 06 concerns expressed by this Court prior to recessing the October 28 hearing
and, the independent review and assessment of the facts, circumstances and applicable law by the District, its agents. representatives, and counsel, the board of directors of the District, on Tuesday, October 31, 1995, met in a special meeting and passed a motion directing its counsel to negotiate a settlement ' of. the pending litigation with the appropriate parties,  accordance with 5 14.12 of the Agreement. in NOW, THESSF0R2, the Joshua Intervenors and the Little Rock School District have decided and agreed to resolve their differences and to request the Court to enter an order on the pending Motion to Enjoin the LRSD from entering into the agreement  on terms which are 9d mutually satisfactory to all parties to the *Mii I' nfii-j nxLiT s- Udi J Mtn AbnidJ 26/ T0 33111/30/1995 17:22 FROM JOHN W.WALKER P.A. TO 3710100 P. 07 pending litigation such to prevent any negative impact on the District's desegregation obligations and to avoid any state law violations, to-witi a. The Joshua Intervenors do hereby agree to the entry of an order by the United States District Court, Eastern District of Arkansas, on their Motion to Enjoin the LRSD from entering into a service agreement which terminates the District's liability under the Agreement to ServiceMaster as well as terminating the District's liability on all matters which were brought or could have been brought in that pending litigation
'o. The District acknowledges that it had no intent to enter into and would not enter into a contract with ServiceMaster had it known that the terms thereof would violate the terms and conditions of the Court-approved desegregation settlement plans, laws of the State of Arkansas, or both. Joshua contends that the Court- approved desegregation plan requires timely involvement of Joshua, the office of Desegregation Monitoring and the Court in matters which may substantially affect the operations of the Little Rock School District as it relates to the District's ability to fund, implement and ca'Ty out its desegregation programs and activities. To the extent that such is required by the Court-approved desegregation plan, the District reaffirms its commitment to do SO
and, c. The Joshua Intervenors have raised questions relating to the possibility that the District has failed to follow prescribed processes and procedures, possibly violated the laws of the State of Arkansas by virtue of the Agreement, and possibly placed the District in the position of negatively impacting its ability to carry out Its desegregation obligations. This Court has likewise Agreement raised concerns regarding the legality o the Agreement pursuant to the laws of the state oS Arkansas. Because of these questions and concerns as well as the Distriet's own independent investigation and assessment of the facts, circumstances and applicable law, both Joshua and the District agree that thia Court should enter an Order pursuant to f 14.12 of the Agreement declaring the Agreement to be null and void and terminating the District's liability thereunder in accordance with the release agreed to by ServiceMaster therein. Because fcl|ll.lHl*HTl.llJ.IT -6-11^30X1995 17:23 FROM JOHN W.UfiLKER P.fl. TO 3710100 P . 08 On the basia o the foregoing agreement, acknowledgements and recitals* the Joshua Intervenors and the Little Rock School District do hereby respectfully request that this Court enter an Order terminating any and all of the District's liability under, . pursuant to, or otherwise relating to the Agreement with ServiceMaster and. affirming the validity of the release of liability by ServiceMaster, all as contained in t 14.12 of the Agreement, Both Joshua and the District agree and acknowledge that any proposed settlement of this litigation is intended to comply '.with the provisions of 1 14.12 of the Agreement which gives the LRSD the right to terminate or modify its liability thereunder through order of this Court, settlement or otherwise. Therefore, any such settlement is expressly conditioned upon the entry of an order by the United States District Court, Eastern District of Arkansas, recognizing the District's right to terminate or modify its liability under the Agreement by order of this Court, settlement or otherwise
terminating the Agreement with ServiceMaster and the pending litigation
and, terminating the District's liability under the Agreement by declaring the Contract to ba void or otherwise unenforceable in accordance with 1 14.12 of the Agreement. Should the Court decline to do so, be unable to do _ so, or for whatever reason such cam not be accomplished, it is the ** agreement of the parties hereto that this proposed settlement will .become null and void to the same extent as though it had never existed, to the extent that such is necessary to prevent contractual, equitable or other liability being imposed upon the fi'riiihitimj.ur -7- AM11/30/1995 17:24 FROM JOHN W.UflLKER P.fl. TO 3710100 P . 09 1 District by ServiceMaster or any other party or person by virtue of this settlement or any actions of the District, Its agents, representatives, counsel, er assigns. Further, should the Court decline to so terminate the District's liability, be unable to do so, or for whatever reason such can not be accomplished, Joshua would retain its right to proceed with evidence and testimony in support of the motion as though Chis settlement never existed. Neither party (LRSD, Joshua or ServiceMaster) would be permitted to utilize this settlement or any of its recitals as - admissions, concessions or other evidence in the proceedings on Joshua's motion, should the hearing resume. Respectfully submitted, JOHN W. WALKER, P,A. Attorneys at Law 1723 Broadway Little Rock, AR 72206 (501) 374-3753 ATTORNEYS FOR JOSHUA INTERVENORS By: John w. Walker Bar I. D. No. . FRIDAY, ELDREDGE & CLARK. Attorneys at Law 2000 First Commercial Building 400 West Capitol Little Rock, ikrkansas 72201-3493 (SOD 376-2011 ATTORNEYS FOR PLAINTIFF . LITTLE ROCK 3CSOGL DISTRICT By: Jerry L. Malone Bar No. I. D. 85096 MMcnwruur -8-I * ' 11^30/1995 17:25 FROM JOHN W.WALKER P.fl. TO 3710100 P. 10 ! CERTIFICATE QF SERVICE I, Jerry L. Malone, do hereby certify that a copy of the foreooing Sectlement of Pending Litigation has been eerved by U, 3. Mail. Dostage prepaid, except as otherwise indicated, on November 1995, upon the followings Mr. John C. Everett EVERETT, MARS & STILLS Attorneys at Law 3822 N. Parkview Drive Post Office Box 1646 Fayetteville, Arkansas 72703-1S4S Mr. Joseph s. Mowery GIROIR i GREGORY Attorneys et Law 111 Center Street, Suite 1900 Little Rock, Arkansas 72201 Mr, Samuel M, Jones, III WRIGHT, LINDSEY & JENNINGS Attorneys at Law 2200 worthan Bank Building 200 West Capitol Little Rock, AR 72201 Mr. Stephen W. Jones JACK, LYON & JONES, P.A. Attorneys at Law 3400 Capitol Towers Capitol a Broadway Streets Little Rock, AR 73301 Mr. Richard W, Roache11 ROACHSLL & STREETT Attorneys at Law First Federal Plaza, Suite 504 401 West Capitol Avenue Little Rock, AR 72201 Mrs. Ann Brown (Hand-delivered as per Order by the Court) Federal Monitor, Office of Desegregation . Heritage West Building, Suite 520 201 East Markham Street Little Rock, AR 72201 Jerry L. Malone teMKatManuuT -9- MM waij pn AJdQiaj wdBSsza se, ta oaa12/07/1995 10:25 FROM JOHN U.UPLKER P.P. TO 3710100 EASTS  IN THE UNITED STATES DISTRICT COD^jgg by EASTERN DISTRICT OF ARKANSAS WESTERN DIVISION i3y
, e-=. -T P. 02 LITTLE ROCK SCHOOL DISTRICT, ET. AL. PLAINTIFFS V. LR-C-32-866 PULASKI COUNTY SPECIAL SCHOOL DISTRICT, ET AL. DEFENDANTS MRS. LORENE JOSHUA, ET AL. INTERVENORS KATHERINE W. KNIGHT, ET AL. INTERVENORS I-. I SERVICEMASTER MANAGEMENT SERVICES, A Limited Partnership MOTION FOR COKTINUANCE INTERVENOR The Joshua Intervenors respectfully request a continuance of the hearing scheduled for December 8, 1995. respectfully show the Court as follows
1. For cause, they On November 29, 1995, intervenor Servicemaster Management Services filed a motion for leave to file an amended answer to the Joshua Intervenors motion to enjoin the Little Rock School District from entering into a contract with Servicemaster. This motion, amended answer and memorandum brief was not received by undersigned counsel for the Joshua Intervenors until December 4, 1995. Therefore, additional time is needed in order for undersigned counsel to prepare a response to said motion, answer and memorandum brief. 2. In preparation tor the hearing on Friday, December 8, t  1995, undersigned counsel did not anticipate any additional12/07/1995 10:26 FROM JOHN U.UflLKER P.fl. TO 3710100 P. 03 pleadings being filed by either plaintiff, defendant or the other intervenors in this 'case. Intervenor Servicemaster^s filing can be construed as surprise given the pending hearing scheduled for Friday of this week. Further preparation by Joshua is now necessary 3, in view of this filing. In addition, on December 4, 1994, the Joshua Intervenors approved the proposed settlement agreement between the Dxstrict and Joshua which was prepared by the school district. That document effectively resolves the controversy between Joshua and the LRSD. 4. In view of the settlement agreement, which Joshua awaits school district counsel to file with the Court, the case should be dismissed except to the extent that the Court wishes to afford Servicemaster a hearing. Joshua, however, has not filed any action against Servicemaster. 5. A continuance would afford the parties, time to prepare their respective positions more fully in the event that the Court finds for example, that Servicemaster is entitled to proceed in this matter. 6. The LRSD and Servicemaster are not prejudiced by this request for delay. WHERJ^ORJS, the Joshua Intervenors pray that this matter be continued pending the filing of further submissions by the LRSD and, if necessary, if the Court declines, to approve the submission, after full further oppoirtunity for preparation by the Joshua Intervenors.12/07x1993 10:27 FROM JOHN U.URLKER P.R. TO 3710100 P . 04 Respectfully subiaitted, John W. Walker, P.A. 1723 Broadway Little Rock, AR (501)Z374-3758 72206 By
CBRTiyiCATB OF SERyiCB I do hereby state that a copy of the foregoi via U.S. mail to all counsel of record on this /- December, 1995. has been sent J> W. Walker day of 12/07/1995 10!24 FROM JOHN W.URLKER P.R. TO 3710100 P. 01 < REASONS G K E E T I N G Q John W. Walker, PX I7B Broadway Littlt tod, M 72206 (501)374.0 fajc (501)3744187 fax transmittal to: fax: fronu date: re: pages: 1-6 ( / / //V , inciuding cover sheet J NOTES: 3-.. i: A riia  f' ei*a.LA,Zi^ RECE DEC 1 J 1995 . ,AS Office of Desegregation Monitoring IN THE UNITED STATES DISTRICT COURT EASTERN DISTRICT OF ARKANSAS WESTERN DIVISION r-. }5y5 I l
' ...-ex. Cl j.K LITTLE ROCK SCHOOL DISTRICT PLAINTIFF VS. NO. LR-C-82-866 PULASKI COUNTY SPECIAL SCHOOL DISTRICT NO. 1, ET AL DEFENDANTS MRS. LORENE JOSHUA, ET AL INTERVENORS KATHERINE W. KNIGHT, ET AL INTERVENORS SERVICEMASTER MANAGEMENT SERVICES, A Limited Partnership INTERVENOR ORDER GRANTING LEAVE TO FILE AMENDED ANSWER Now on this day of s.. 1995, this matter comes on to be heard upon the motion of the Intervenor, ServiceMaster Management Services, for leave to file an amended answer in this case. After consideration of such motion, the Court doth find that such motion should be, and hereby is, granted. IT IS SO ORDERED. 1 4' Hon. Susan Webber Wnght, United States District Court Judge mis DOCLVE^ .ED ONDCCKET SHEET IN COMPLIA ON 2. .3 r.r BY VOR 79(a) FRCP Ad 2 5 8C ' 1 6^ cm/ EO I DEC 1 ,31995 IN THE UNITED STATES DISTRICT COURT EASTERN DISTRICT OF ARKANSAS WESTERN DIVISION i i 1595 Office of Desegregation Monitoring Py:V .y. ClL^' JC ClE.-.X CEP CLERK LITTLE ROCK SCHOOL DISTRICT PLAINTIFF No. LR-C-82-866 PULASKI COUNTY SPECIAL SCHOOL DISTRICT No. 1, ET AL DEFENDANTS MRS. LORENE JOSHUA, ET AL INTERVENORS KATHERINE KNIGHT, ET AL INTERVENORS SERVICEMASTER MANAGEMENT SERVICES, A LIMITED PARTNERSHIP INTERVENOR ORDER The issue before the Court concerns a contract that the vs. I 0 b Superintendent of the Little Rock School District, Dr. Henry Williams, entered into with Servicemaster Management Services, L.P. on September 20, 1995.' The contract (Ex. 359) provides that ServiceMaster will provide management services to the district for a period of five years for $98,659 per month. subject to adjustment. The district sought the advice of counsel before entering into the contract, which was drafted by ServiceMaster, and several contract modifications were made pursuant to the advice of district counsel. On August 31, 1995, the district board of directors held a hearing at which it authorized Dr. Williams to negotiate and enter into the contract on behalf of the district. Board member Pat Gee testified at a hearing before this Court that she asked the board to review the final contract before Dr. Williams signed it. However, the board did not review the final document before Dr. Williams signed it. I 2 5 86 IThe minutes for the August 31, 1995 meeting of the Little Rock School District Board of Directors reflect that the board was aware that the Joshua Intervenors had filed a motion with this Court for a preliminary injunction asking the Court to enjoin LRSD from entering into a contract with ServiceMaster. Joshua alleged the following grounds for issuance of the injunction: (1) that the district had not discussed the proposed management services contract with the Joshua Intervenors
(2) that the proposed contract has potential adverse racial effect and impact
(3) that the contract has not been let for bids in accordance with Arkansas law
(4) that the expenditures required of the district under the contract would inhibit the district in meeting its desegregation obligations
and (5) on Joshua's belief that the contract was not negotiated at arms' length. Aware of the pending motion for a preliminary injunction, LRSD and ServiceMaster included the following clause 14.12) in their contract: Pending litigation. Each of the parties agree that as of the date of the execution of this Agreement, a motion to enjoin school from entering into this Agreement with ServiceMaster is now pending in the United States District Court, Eastern District of Arkansas, Western Division, styled "Little Rock School District v. Pulaski County Special School District No. 1, et al.". No. LR-C- 82-866. ServiceMaster does hereby release and forever discharge School from any and all actions, causes of action, damages, claims or demands which ServiceMaster may hereinafter have arising out of or in anyway relating directly or indirectly, from orders issued by the United States District Court which may terminate or modify this Agreement. School is under no obligation or duty to appeal any decisions of the United States District Court affecting this Agreement. liability hereunder will Further, the be subject to the School's outcome -2-(through either settlement, otherwise) of that litigation. order of the Court or The Court set the matter for a hearing on Saturday, October 28, 1995. ServiceMaster filed a motion to intervene, which the Court granted. During the hearing the Court noted from the bench that Joshua had a difficult burden of proof with respect to establishing that the contract would interfere with the district's ability to carry out its desegregation obligations, as the district maintained that it would spend no more money on the contract than it already spends on maintenance and custodial services. The Court further noted, without deciding, that Joshua might be more likely to succeed on its argument that state law had not been followed because the district had not followed the bidding procedures established by Ark. Code Ann.  6-21-301 et seq.^ The Court recessed the hearing before the Joshua Intervenors had completed their proof. However, Joshua did establish that bidding procedures were not used and that neither the superintendent nor anyone else from the LRSD administration consulted with Joshua prior to entering into the contract. The hearing was continued until December 8, 1995. On October 31, 1995, the Little Rock School District Board of Directors discussed the ServiceMaster contract in absence of their attorneys. The board passed a motion with respect to settlement of 2 ServiceMaster contends that the contract is one for professional services, exempt from the bidding requirements set forth in the statute. -3-the ServiceMaster issue. The minutes for the October 31 meeting (Ex. 378) read as follows: III. ACTION ITEMS ServiceMaster Contract: Ms. Pondexter called for a motion on the ServiceMaster contract. Dr. Daugherty stated that he would prefer to question District attorneys about the contract prior to making a motion, but attorneys for the District were not present. Dr. Daugherty made a motion that the Board ask the attorneys to settle the contract with the appropriate parties. r " " ' __
____1 __ He stated that his motion was based on the pending litigation and the fact that Judge Wright had stated a belief that the contact [sic] violation of Arkansas law. is a possible Ms. Gee seconded the motion. Ms. Magness, opposition to Mr. the Riggs, and Dr. motion. Mitchell spoke in They suggested a more appropriate action would be to allow the District's attorneys to work within the court system to settle the litigation and to then abide by any rulings made by Judge Wright. Ms. Pondexter spoke in favor of the motion and indicated that the District's attorneys were being instructed by the Board to seek a reasonable settlement to save the cost of litigation. instructed to The attorneys are not being motion. "give away the company store" by this She stated that an Attorney General's opinion found the contract to be a violation of State law. The attorneys' responsibility is to return to the Board if they are unable to reach a settlement, in which case the litigation would continue. She then called for the vote. The motion passed 4-3 with Ms. Pondexter, Ms. Gee, Ms. Strickland and Dr. Daugherty voting "yes. II Magness, Dr. Mitchell and Mr. Riggs voting and Ms. "no." At the continuation of the hearing on December 8 counsel for Joshua tendered into evidence a document entitled "Settlement" (Ex. 3 73) , which Joshua maintains constitutes a settlement offer by LRSD that was accepted by Joshua (Ex. 374) with respect to the -4-ServiceMaster contract. ServiceMaster was not a party to this H settlement" even though it would have a considerable impact upon ServiceMaster's contract with the LRSD. This "settlement" was delivered by fax to counsel for Joshua by counsel for the LRSD on or about December 1. Counsel for Joshua, Mr. John Walker, claims that this constitutes an offer by LRSD to settle the matter with Joshua by having the court issue an order enjoining the LRSD from entering into the ServiceMaster agreement and terminating the district's liability pursuant to Paragraph 14.12 of the contract. Little Rock contends that this document was not intended as an offer to settle, in that it is stamped "Draft" (illegible on the court's copy) and is not signed by any party or the attorney for any party. LRSD has also implied, by questioning of witnesses. that Mr. Jerry Malone, the LRSD attorney who apparently drafted and sent this "settlement" document, did not have authority from the board to settle with Joshua. Linda Pondexter, President of the LRSD Board of Directors, testified on December 8 that it was her understanding that on October 31, the Board was authorizing its attorneys to settle with the Joshua Intervenors, not with ServiceMaster. Pat Gee, another board member, testified on December 8 that the motion regarding settlement was intended to get the district out of its contract obligations without liability. This Court declines to rule on whether this "settlement It constitutes a binding agreement on the district or on whether the board of directors delegated Mr. Malone the authority to enter into -5-it with Joshua. The Court finds that even if Mr. Malone had the authority and even if it was an offer to settle which Joshua accepted, public policy prohibits this type of settlement. This "settlement" purports to create a situation in which this Court, by agreement of Joshua and LRSD, would by court order declare the agreement to be non-binding on the part of LRSD and would relieve LRSD of any liability. Indeed, Paragraph 14.12 of the ServiceMaster contract provides an If escape clause" for LRSD should this Court terminate or modify the ServiceMaster agreement. It provides that LRSD shall have no obligation to appeal decisions affecting the contract. Therefore, it implies that LRSD will in good faith abide by the terms of the contract and will not contract with Joshua or anyone else to procure a court order allowing it to escape liability. It would not be consistent with public policy to permit one party to contract to escape its obligations unilaterally without a similar provision for the other contracting party. This Court finds that ServiceMaster and LRSD did not intend that this clause would permit Little Rock to escape liability without a ruling by this Court on the merits. Therefore, the Court holds that this purported settlement cannot be enforced against ServiceMaster. IT IS SO ORDERED this 11th day of December 1995. "^jnitedstatesdistrictTjudg JUDGE -6- rHIS DOCUMENT ENTERED ON DOCKET SHEET IN WJTl COMPLIANCE WJ' ON 12/1(1 ULE 58 AND/OR 79(a) FRCP aC- ' DEC 1 a 1995 Office of Desegregaiion Motmofing IN THE UNITED STATES DISTRICT COURT EASTERN DISTRICT OF ARKANSAS WESTERN DIVISION U3 L 'if-G .\ i ' 1995 LITTLE ROCK SCHOOL DISTRICT vs. LR-C-82-866 -xf-iS Dy: ClL.' CURK I T X E . 1/ PULASKI COUNTY SPECIAL SCHOOL DISTRICT, ET AL ORDER Joshua's motion for continuance of the hearing scheduled for December 8, 1995, was denied in open Court during hearings conducted on December 8, 1995, and should be removed as a pending motion. The clerk is directed to make the proper entry to remove this motion [#2579] from the motions' list. IT IS SO ORDERED this // day of December, 1995. SUSAN vj: 'EBBER WRIGHT United States District Judge mis D
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A.NCE VViTi- ON iN DOCKET SHEET IN T.O/CR 79(a) FRCP BY 2 5 8 5IN THE UNITED STATES DISTRICT COURT EASTERN DISTRICT OF ARKANSAS EASTERN DIVISION FILED U.S. DISTRICT COURT eastern district ARKANSAS DEC 2 2 1995 LITTLE ROCK SCHOOL DISTRICT, ET. AL. V. LR-C-a3-866 PULASKI COUNTY SPECIAL SCHOOL DISTRICT, ET. AL MRS. LORENE JOSHUA, ET. AL. KATHERINE W. KNIGHT, ET. AL. JAMES W. McCORMACK, CLERK By
PLAINTIFFS-- DEP CLERK RECEn^ DEFENDANTS DEC 2 7 1995 INTERVENORS Office of Oesegregation Monitoring INTERVENORS MOTION FOR RECONSIDERATION ANETTOR COMPLETION-OF HEARING The Joshua Intervenors ("Joshua") respectfully move for reconsideration of this Court's Order of December Ilf 1995, addressing the issues arising in the course of consideration of the Joshua motion to enjoin the Little Rock School District ("LRSD") from entering into a contract with ServiceMaster Management Services, L. P. ("ServiceMaster"). Joshua Intervenors further request that the Court schedule an additional hearing to complete consideration of the Joshua's motion. This motion is based upon the accompanying brief, the record in this case and the following allegations
1. As the Court's Order of December 11, 1995, reveals (at 2), the Joshua Intervenors alleged multiple grounds in support of their motion. Joshua Intervenors have not completed their presentation in support of their motion. and the Court has not ruled on the substantive grounds which it sets forth. See December 11, 1995, Order at 3, 6. 2. The safeguarding of the system's resources in order to / 1permit the LRSD to satisfy the reguirements of federal law is an important element of the current phase of this case. 3. The current desegregation plan of the LRSD emphasizes voluntary choice of schools. The LRSD's relevant "business case" of August 24, 1995, cites a relationship between the maintenance of schools and enrollment (at 2 "Problem Definition"
at 7-8 "Impact Analysis"). The business case indicates that the contract would be "paid for" by: Position reductions over time through attrition 21 PTE custodians 14 PTE building substitutes Consideration of the implications of these reductions is not complete. 4. For the reasons set forth in the accompanying brief, the Joshua Intervenors respectfully submit that the Court's reliance on grounds of "public policy" in the December 11, 1995, Order,(at 6) was in error. 5. For the reasons set forth in the accompanying brief, the Joshua Intervenors respectfully submit that the Court's * * interpretation of the contract (Order at 6) was in error. 6. Based upon our research, there are substantial grounds to doubt that the Order of December 11, 1995, is an appealable Order. 7. The amount of in-court time needed to complete consideration of the motion can be minimized by the taking and use of depositions. WHEREFORE, the Joshua Intervenors motions this Court to reconsider its December 11, 1995, Order and to allow the Joshua 2Intervenors to proceed with their presentation to support their motion and for all other relief deemed proper and necessary by the Court. Respectfully submitted, John W. Walker, P.A. 1723 S. Broadway Little (501)/ Rock, AR 74-3758 72206 By
_____ W. Walker CERTIFICATE OF SERVICE I, John W. Walker, do hereby certify that copy of the sent to all counsel of record via U.S. foregoing was postage prepaid on this day of em, . mail with 95. J, .n W. Walker a 3FILED U.S. DISTRICT COURT eastern district ARKANSAS IN THE UNITED STATES DISTRICT COURT EASTERN DISTRICT OF ARKANSAS nF n 2 21935 EASTERN DIVISION JAMES W. McCORMACK, CLERK LITTLE ROCK SCHOOL DISTRICT, ET. AL. By.-. - PLAINTIFFS.. . CLERK V. LR-C-82-866 PULASKI COUNTY SPECIAL SCHOOL DISTRICT, ET. AL. RECEJVEr DEFENDANTS MRS. LORENE JOSHUA, ET. AL. DEC 2 7 1995 INTERVENORS KATHERINE W. KNIGHT, ET. AL. Office of Doseoregation Monnenng INTERVENORS BRIEF IN SUPPORT OF  MOTION FOR RECONSIDERATION AND COMPLETION OF HEARING The Plaintiffs, the Little Rock School District ("LRSD"), entered into a contract with ServiceMaster Management Services, L.P. ("ServiceMaster) on September 20, 1995.' The Joshua Intervenors filed a Motion to enjoin the contract on the grounds that the contract was in contradiction of the intent of the desegregation plan and it violated state laws of the bidding process. The contract was drafted by ServiceMaster and modifications were made by counsel for the LRSD. Despite the modifications. ServiceMaster signed the contract with the LRSD. A hearing on Joshua's Motion to Enjoin was held on December 10, 1995. ServiceMaster filed a motion to intervene, which was granted. At issue in the hearing was and is paragraph 14.12 of the LRSD  The LRSD board of directors authorized Superintendent Dr. Henry Williams to negotiate and enter a contract on behalf of the The LRSD board did not have an opportunity to review the district. final document before Dr. Williams signed it. / 1Management Services Agreement with ServiceMaster (at 12) which is entitled "Pending Litigation." The Pending Litigation provision reads as follows: Each of the parties agree that as of the date of the execution of this Agreement a motion to enjoin School [LRSD] from entering into this Agreement with ServiceMaster is now pending in the United States District Court, Eastern District of Western Arkansas, Division, styled Little Rock School District V. Pulaski County Special School District No. 1, et. al.. No. LR-C-82-866. ServiceMaster does hereby release and forever discharge al., causes of School from any and all actions, action, damages, claims demands which ServiceMaster may hereafter have, arising out or directly or of or in any way relating, indirectly from orders issued by the United States District Court which may terminate or School is under no modify this Agreement, obligation or duty to appeal any decisions of the United States District Court affecting this Agreement. Further, School's liability hereunder will be subject to the outcome (through either settlement, order of the the Court or otherwise) of that litigation. Representatives of the LRSD and ServiceMaster signed the contract on September 20, 1995. Thus, a binding contract was created between the parties. It is the position of the Joshua Intervenors that a settlement was reached between the LRSD and the Joshua Intervenors. Pursuant to paragraph 14.12 of the contract between the LRSD and ServiceMaster, such a settlement would terminate the contract with ServiceMaster without liability to the LRSD. In its December 11, / 1995, Order the Court refused to rule on whether this "Settlement" constitutes a binding agreement on the district or on whether the board of directors delegated Mr. Malone the authority to enter into 2it with Joshua. The Court went on to say that it "finds that even if Mr. Malone had the authority and even if it was an offer to settle which Joshua accepted, public policy prohibits this type of settlement. Indeed, Paragraph 14,12 of the ServiceMaster contract provides an 'escape clause' for LRSD should this Court terminate or modify the ServiceMaster agreement. It would not be consistent with public policy to permit one party to escape its obligations unilaterally without a similar provision for the other contracting party." The Eighth Circuit Court of Appeals has held to the contrary. The Eighth Circuit has held that while a termination clause may indicate willingness to engage in cold-hearted economic a competition, it simply does not violate any recognized Arkansas public policy. Union Nat. Bank v. Federal Nat. Mortg. Ass'n, 860 F.2d 847 (8th Cir. 1988). Union National Bank and Federal National Mortgage Association ("FNMA") entered into contract which contained a unilateral termination clause. The clause read as follows: We may [FNMA] terminate the provisions of this Contract covering the servicing under this Contract of any or all mortgages that we This may be done by following entirely own. the procedure outlined below. 1. Termination without cause. We [FNMA] may terminate by giving the Lender 30 days notice of the termination, and by paying the Lender a termination fee. This termination fee will be specified in our Guides as we may modify them from time to time. Union. 860 F.2d at 849. FNMA sought to terminate the contract and Union argued that to a / 3allow FNMA the right to terminate the agreement without cause was unenforceable as contrary to public policy. The Eighth Circuit analogized this situation to an "at will" or "without cause" termination right in employment contracts. The right to terminate "at will" or "without cause" is not against public policy unless the reason alleged for the discharge is so repugnant to the general good as to deserve the label 'against public policy'." Union. 860 F.2d at 853 (citing Lucas v. Brown & Root, Inc.. 736 F.2d 1202 (8th Cir. 1984)). Similarly, the contract between LRSD and ServiceMaster contained a pending litigation clause which is the equivalent of a termination clause. The clause requires Servicemaster to release and forever discharge the LRSD from "any and all actions and damages that may arise from orders issued by the United States District Court which may terminate or modify the contract." It has been held by the Eighth Circuit that this clause does not violate any Arkansas public policy. The Eighth Circuit Court of Appeals is not alone in this holding. The Fourth Circuit Court of Appeals has held that the power to refuse to enforce contracts on the grounds of public policy is therefore limited to occasions where the contract would violate "some explicit public policy" that is "well-defined and dominant, and [which] is to be ascertained 'by reference to the / laws and legal precedents and not from general considerations of supposed public interests'." St. Paul Mercury Ins. Co. v. Duke University. 849 F.2d 133 (4 th Cir. 1988) (citing United 4Paperworkers International Union v. Misco Inc., 484 U.S. 29, 108 S.Ct. 373, 98 L.Ed.2d 286 (1987) citations omitted). The Court went on to state that the usual and most important function of courts of justice is rather to maintain and enforce contracts, than to enable parties thereto escape from their obligations on the pretext of public policy, unless it clearly appears that they contravene public right or the general welfare. St. Paul. 849 F.2d at 135 (citing Smithy Braedon Co. V. Hadid, 825 F.2d 787, 790 (4th Cir. 1987)). Finally, the Court concluded that it was the court's duty to enforce the contract as written unless enforcement was forbidden by an existent state policy. St. Paul. 849 F.2d at 136. In the case at bar, it is the Court's duty to enforce the contract between the LRSD and ServiceMaster as written since it does not violate any established Arkansas public policy. ServiceMaster entered into the contract with the LRSD with full knowledge of the meaning of paragraph 14.12. As a result. ServiceMaster cannot argue unconscionability. The Eighth Circuit in Union stated that the district court also ruled that, despite a substantial inequality in the bargaining power of the parties, the Contract was not unconscionable. Union. 860 F.2d at 853 (footnote 12) . There does not seem to have been any inequality in the bargaining power between the LRSD and ServiceMaster. Therefore, there are no grounds for an argument of unconscionability. Additionally, ServiceMaster voluntarily agreed to release and discharge the LRSD from "any and all actions, causes of actions, damages, claims or demands which may arise from orders issued by / 5R the United States District Court which may terminate or modify the agreement. ( Contract, Paragraph 14.12.). The Arkansas Court of Appeals has held that subject to public policy considerations, a party may voluntarily agree to hold another harmless against loss by whatever cause it might be sustained. Weaver-Bailey Con'trs v. Fiske Carter Const.. 9 Ark.App. 192, 657 S.W.2d 209 (1983) . As previously stated. there is no Arkansas public policy which prohibits the inclusion of a unilateral termination clause in a contract between two parties even if the parties are of unequal bargaining power. Therefore, ServiceMaster voluntarily waived its ight to hold the LRSD liable for breach of contract and damages r resulting therefrom. The Court may not rewrite the contract to provide relief to ServiceMaster. Arkansas law states in the absence of violation of some clearly established public policy, the courts will not remake a contract between the parties to devise a basis of relief where none exists under the contract. M.B.M. Co. V. Counce. 268 Ark. 269, 569 S.W.2d 681 (1980). Pursuant to Arkansas law, the Court may not rewrite or modify the contract to grant relief to ServiceMaster when ServiceMaster entered into the contract with full knowledge of the impact of the Pending Litigation clause. In conclusion, ServiceMaster did not assert that the Pending Litigation clause violated public policy nor inclusion of the clause was unconscionable. did it assert that The clause is valid / and does not violate any established Arkansas public policy. Therefore, if is found that a settlement was reached between the 6LRSD and Joshua Intervenors, the pending litigation clause should be effectuated to render the contract between the LRSD and ServiceMaster discharged without liability to LRSD. Respectfully submitted, John W. Walker, P.A. 1723 S^ Little I Ri (501) By:__ Jo] <7 iroadway bk, AR 7220 W ." Walkfer CERTIFICATE OF SERVICE a copy of the I, John W. Walker, do hereby certify that foregoing was sei] to all counsel of record via U.S. mail postage paid on this day of December, 19^. o n'W. Walker I 7 RECEIV filed JAN 19 1996 **) atassB Ofiice ot Desefltegavon MonAofii'S 'JAN 1 7 1995 JAMES W. JN THE UNITED STATES DISTRICT <Q^T EASTERN DISTRICT OF ARKANSAS WESTERN DIVISION ^<^CORMACK, ClRK OEP CURK LITTLE ROCK SCHOOL DISTRICT, ET AL. PLAINTIFFS V. NO. LR-C-82-866 PULASKI COUNTY SPECIAL SCHOOL DISTRICT, ET AL. DEFENDANTS MRS. LORENE JOSHUA, ET AL. INTERVENORS KATHERINE W. KNIGHT, ET AL. INTERVENORS SERVICEMASTER MANAGEMENT SERVICES, A Limited Partnership INTERVENOR MOTION FOR LEAVE TO FILE REPLY The Joshua Intervenors respectfully request the Court to afford them any opportunity to respond to the submission filed herein on behalf of Servicemaster Management Services dated January 8, 1996. The response raises and addresses several cases which were not raised and discussed in our brief and motion for reconsideration. There is no prejudice to the Little Rock School District or Servicemaster by allowing such a submission. We also note that the LRSD has taken no position regarding wither the position of Servicemaster or Joshua. We further request five days beyond the date of an order granting permission to submit a reply in which to file our response.>1.1 >* ,I Undersigned counsel is authorized to say that counsel for LRSD and Servicemaster have no objection to this request. Respectfully submitted, John W. Walker, P.A. 1723 Broadway Little Rock, AR (501^374-3758 72206 Ji Walker CERTIFICATE OF SERVICE th I do hereby state that a copy of the forego^g was delivered via U.S. mail to all counsel of record on this l^h day of January, 1996. IN THE UNITED STATES DISTRICT COURT EASTERN DISTRICT OF ARKANSAS WESTERN DIVISION LITTLE ROCK SCHOOL DISTRICT No. LR-C-82-866 PULASKI COUNTY SPECIAL SCHOOL DISTRICT No. 1, ET AL MRS. LORENE JOSHUA, ET AL KATHERINE KNIGHT, ET AL SERVICEMASTER MANAGEMENT SERVICES, A Limited Partnership FILED U.S. DISTRICT COURT EASTERN DISTRICT ARKANSAS JAN I 3 1996 JAMES/W. By
ES/M(jC^ORMACK, CLERK ''1 ' DEP CCLLEERRKK PLAINTIFF RECEIVE' DEFENDANTS INTERVENORS JAN 1 9 1996 INTERVENORS Office of Desefiregation f'^&nito.-ifqiNTERVENORS ORDER Upon motion of the Joshua Intervenors, and there being no objections. the time for filing a reply to the Servicemaster submission dated January 8, 1996, is hereby extended to and vs. including January 26, 1996. IT IS SO ORDERED this 18th day of January 1996. RED ON DOC:<ET SHEET IN I .1 R^/jT JUDGE Odis DOCUMEfiT Ef.'T COMPLIANCE WITH RULE 58 AND/OR 79(a) FRCP _gY -L 2 6 0 4 LRSD SUPTS OFFICE 431 P02 JfiN 19 96 12:52 91^ Little Rock School District OFFICE OF THE SUPERINTENDENT January 18, 1996 Mr. John Walker, Attornev 1723 S. Broadway Little Rock, AR 72206 Dear Mr. Walker: Once again I find it necessary to respond to one of your letters which tells a half truth supports what you wan. e Board. Ann Brown, andLtheXheL taow wnat actually occurred. You have an uncanny way of distorting the truth. or think, and not Yes, you were present at the meeting, and yes, you wanted to raise questions and issues that st",'! "iied by Le Cour,. I rcfuald L actaX!X ' on Md no'pL.T.' belief that your presence at die meen'ngwas to gaUierinforLL P meeting that was designed to answer questions and address litigators. Your concerns and questions as a litigator currently being litigated and studied by the Court. concerns ServiceMaster contract should be addressed --  questions as a litigator regarding the in Court, not in a meeting of emplovees. In response to your contention that I condition with regard to the misrepresented the Board or the Districts fiscal J  amount of money the District has to spend on new custodial equipment and supplies, as well as salary increases, is absolutely not true. What I said, and made very clear, was that if we, equipment for custodial as a District, had to replace all of the wtherrnei ietoh thie^uch as the ServiceMastesr upgegoepstleed atrhea td iof iwngf tthhaatt wwee would indeed have to have increased salaries for custodians \xra</ oe T^ ... >*w**w. revenue tVhUrioVuUgXhU <a* UmlUilIldaSgCe increase. By the IT c?aLn oLnliy mTake recommendations in this regard.  milla=g e incr ease ccaammppaaiiggnn. Also. I would like to know when aU of the District custodians became provide me with all records which indicate that your clients. Please custodians to represent their interest As far as I know, that ^oup attomw that ft.., *__ 1_____ Of you were contacted and retained by the attorney that represents the teacher group. IS represented by the Sincerely, <J Henry P. Williams Superintendent of Schools LRSD SUPTS OFFICE 431 P03 JAN 19 96 12:53 January 18, 1995 Page 2 cc: Chris Heller Ann Brown Linda Pondexter LRSD Board Members f.JOHN W. WALKER. PA 3 Uiija Vxi? ^'x:3 I* JOHN W. WALKER RALPH WASHINGTON MARK BURNETTE AUSTIN PORTER JR. ATTORNEY AT LAW 1723 BROADWAY LITTLE ROCK. ARKANSAS 72206 TELEPHONE (501) 374-3758 FAX (501) 374-4187 JAN 1 9 1996 Office cf ^eseg.-egaacn Modiicnng January 17,1996 [DELIVERED BY FAX & U.S. MAIL] Dr. Henry P. Williams Superintendent of Schools Little Rock School District 810 West Markham Street Little Rock, AR 72201 Dear Dr. Williams: I represent a number of custodians. Today, I requested an opportunity to address the group meeting were you were present and to be allowed to ask some questions regarding comments made by you or Service Master representatives. I also reduced my request to writing in a letter to Mr. Fred Smith. You both declined my request. I now wish to state that you made representations to the group to the effect that the district was financially unable to provide custodian equipment and supplies and, therefore, that an outside group was required to do so. You specifically held the school board responsible for the financial condition of the district stating that a mileage was needed in order to provide wage increases for the employees and other needs of the district. I believe you misrepresented the district's financial condition as well as the necessity for Service Masters management services, supplies and equipment. Would you kindly, therefore, make available a tape of the meeting to the school board members so that they may independently appraise your comments as well as those of the Service Master representative. Would you also explain why I could not raise issues on behalf of my clients. Please recall that cleanliness issues are an integral part of the desegregation plan.Page Two January 17,1996 Please let me hear from you by return fax to this letter and my hand-written letter to Mr. Fred Smith. Very truly yours, [Original Signed By Uni John W. Walker signed Counsel] wCc Ld- JWW-.lp cc: Mr. Fred Smith Ms. Ann Brown Ms. Linda Pondexter LRSD Board Members [DICTATED BUT NOT READ]JOHN W. WALKER RALPH WASHINGTON MARK BURNETTE AUSTIN PORTER, JR. JOHN w. Walker, P.A. Attorney At Law 1723 Broadway Little Rock, Arkansas 72206 Telephone (501) 374-3758 FAX (501) 374-4187 .MN 2 2 1996 Office of Desegregaiicn Monnoring K. January 19, 1996 Dr. Henry Williams Superintendent of Schools Little Rock School District 810 West Markham Little Rock, AR 72201 Dear Dr. Williams: This letter is a seriatim response to your letter to of January 18, 1996. You indicated that you declined to allow me to speak to the custodians or raise questions regarding the Servicemaster (1) matter. So that it will not be regarded as a "half truth", please acknowledge that I neither said or did anything during that meeting other than to raise my hand. Would you also please acknowledge that we did not exchange any words at that meeting and that your beliefs which were written in your letter were not publicized at the meeting. (2) You indicated that the Board's fiscal condition did not allow for the purchase of 1.2 million dollars in equipment, supplies and services. Please acknowledge that you indicated that the District could not afford to meet its custodial needs within its existing budget and that the only way of meeting the custodial needs of the District was by outsourcing. Now, for my position for purposes of discussion, neither you nor Mr. Fred Smith have been in a position to state what the District's actual for financial position is. Moreover, there are means available within the ADE to allow school districts loan funds for equipment purchases and meet other exigencies. What you have done with Servicemaster is simply to accept a loan which, I submit, you will repay many times over with interest and for services rendered. I might further add that if the buildings were in such bad condition, then Mr. Doug Eaton necessarily had some responsibility for that circumstance. The District practice has been to transfer, demote or terminate unsatisfactorily performing administrators. Mr. Eaton has been rewarded, rather than "punished", by having had his budget and staff substantially increased while his responsibilities for custodians have been diminished. This is giving him time to use his skills in educational policy making, an area for which he is not trained, certified or experienced.(3) You did indicate that the only way that the custodians could receive pay raises is by a millage increase. As a party representative in the desegregation case, I would like to know how you can make this statement in view of the transfers that you have made of people into higher level positions. The examples that I would like for you to address are those of Ms. Griffin, your personal secretary and Ms. Keathley, Dr. Mayo's personal secretary, though titled otherwise, each of whom received pay raises over a two year period of between 10 and 15 thousand dollars or more. Their raises alone I submit, if directed toward approximately 300 custodians, would have allowed each custodian a raise of $100.00. With the other raises of similarly situated people, it is easy to see that this group of employees could have been easily afforded, within the present budget, a 3 or 4 percent raise without a millage increase. I am sure you could sense the low morale of the custodians and their great sense of distrust which they had of you and Servicemaster. Surely you must know that low morale of this group of employees will necessarily result in lower levels of work performance and will accordingly reflect upon the desegregation plan. Please reflect on this. (4) You indicate that I contend that I represent all district custodians. did, let me hasten to correct that. If I suggested that, which I don't think I I do not. I do represent a number of them with respect to issues which are presently pending. I am withholding legal action against the District because of my December commitment to you which extends through the end of January. I had hoped that there would have been some substantive manifestation of reciprocity during this interval. It appears that I was wrong, but today is January 19, 1996
we still still have 12 days to go. Pardon the pun, please.) I still have hope (being from Hope - Sincerely, John W. Walker JWW:js cc: Mr. Chris Heller Ms. Ann Brown Ms. Linda Pondexter LRSD Board MembersALED COURT EASTERN DISTRICT ARKANSAS IN THE UNITED STATES DISTRICT COURT JAW 2 6 tqo-s EASTERN DISTRICT OF ARKANSAS WESTERN DISTRICT JAMES W. McCORMACK, CLERK By.-------------------- DEP CLERK LITTLE ROCK SCHOOL DISTRICT, ET. AL. PLAINTIFFS V. NO. LR-C-82-866 PULASKI COUNTY SPECIAL SCHOOL DISTRICT, ET. AL. received DEFENDANTS MRS. LORENE JOSHUA, ET. AL. KATHERINE W. KNIGHT, ET. AL.  IAN 3 0 1996 INTERVENORS INTERVENORS Office of Desegregation SERVICEMASTER MANAGEMENT SERVICES, A Limited Partnership -__ Momoring INTERVENOR JOSHUA INTERVENORS' REPLY BRIEF The Joshua Intervenors filed a Motion and a Brief in Support of Reconsideration and Completion of Hearing regarding settlement between the Little Rock School District ("LRSD") and Joshua Intervenors. ServiceMaster has intervened in the matter as a party of interest since its contract with LRSD is involved. A hearing was held in December of 1995 and the Court issued a subsequent Order on December 11, 1995 in which it refused to rule on the merits of whether a settlement between LRSD and Joshua Intervenors existed. Instead the Court ruled that a provision in the contract between ServiceMaster and LRSD was against public policy and could not be enforced. Joshua Intervenors then filed its Motion for Reconsideration. ServiceMaster responded that the provision was not a terminationclause and the Court should examine the intent of the parties as to the provision in question. The provision in question, Section 14.12 entitled Pending Litigation, reads as follows: Each of the parties agree that as of the date of the execution of this Agreement a motion to enjoin School from entering this Agreement with ServiceMaster is now pending in the United States District Court, Eastern District of Arkansas, Western Division, styled Little Rock School District v. Pulaski County School District No. 1, et. al.. No. LR-C-82-866. ServiceMaster does hereby release and forever discharge School from any and all actions, causes of action, damages, claims or demands which ServiceMaster may hereafter have, arising out of or in any way relating, directly or indirectly, from orders issued by the United States District Court which may terminate or modify this Agreement. (emphasis added) School is under no obligation or duty to appeal any decisions of the United States District Court affecting this Agreement. Further, the School's liability hereunder will be subject to the outcome (through either settlement, order of the Court or otherwise) of that litigation. The Court stated this provision allowed one party to unilaterally escape its obligation without a similar provision to the other and was against public policy. The Court did not address the merits of whether there was a settlement between LRSD and Joshua Intervenors. Joshua Intervenors have requested that the Court reconsider its ruling on the grounds that the United States Eighth Circuit Court of Appeals has stated that clauses in contracts that allow termination without cause are not against any established Arkansas public policy. ServiceMaster responded that Joshua Intervenors analogized thei 5S^ case improperly. Review of Joshua Intervenors' Brief in Support of the Motion for Reconsideration will show that Joshua cited the case for the law and not for the facts. The law was simply that a party may unilaterally terminate a contract and it does not go against any established Arkansas public policy. Union Nat. Bank v. Federal Nat. Mortg. Ass'n, 860 F.2d 847, 853 (Sth Cir. 1988) . The termination without clause did provide for a termination fee to be paid to Union. Union, 860 F.2d at 849. Next, ServiceMaster argued the intent of the parties was to be bound to the contract. The dominant rule IS that the interpretation of a contract is controlled by the intention of the parties, and it is the duty of the courts to ascertain and give effect to the meaning and intent of the parties as expressed in the language used. Les-Bil V. General Waterworks, 256 Ark. 905, 511 S.W.2d 166 (1974). The express language used in the provision made "the School's liability hereunder will be subject to the outcome (through either settlement, order of the Court or otherwise) of that litigation" namely the motion in the school case concerning the ServiceMaster contract. When ServiceMaster entered into this Agreement it was fully aware of pending litigation. With full knowledge, ServiceMaster expressly agreed to be bound until a settlement or Court order terminated the contract. It is clear that ServiceMaster intended to be loound until a settlement or Court order terminated the contract. The Arkansas Court of Appeals has held that parol evidence isnot admissible to show subjective intent of the parties. Thi rule does not allow a party to prove by oral testimony that clear and unambiguous words were subjectively intended to have a meaning not fairly attributable to them. Martin v. Martin, 6 Ark.J^p. 18, 637 S.W.2d 612 (1982) . ServiceMaster cited a case which held that" [i]t is a well- established principle of law that. in the interpretation or construction of the contract. the construction the parties  themselves have placed on the contract is entitled to great weight. and will generally be adopted by the courts in giving effect to its provisions. This is especially true in cases of ambiguity in the written contract." Worthen Bank & Trust Co. v. Adair, 15 Ark.App. 144, 151, 690 S.W.2d 727, 731 (En Banc 1985) . There is no ambiguity in the provision. The intent of the parties is clearly expressed in the provision. Section 14.12. The construction is that settlement or an order from the Court will terminate the contract. The objective manifestation of intent, not subjective manifestation, is what the court examines. The Court ruled that the provision. Section 14.12, was against public policy and refused to rule on the merits of the case. Joshua Intervenors motion that, in light of case law stating a provision which allows termination, even by only one party, is not against any established Arkansas public policy, the Court reconsider its ruling. In addition, Joshua Intervenors request that the Court determine whether LRSD and Joshua Intervenors entered into settlement which serves as grounds for termination of the contract between LRSD and ServiceMaster. In addition. since ServiceMaster was not a party to the litigation when the contract was entered, it is unreasonable to interpret the last sentence of 14.12 to include ServiceMaster as a party involved in any settlement. For the foregoing reasons, the reasons advanced by Servicemaster in oposition to reconsideration should be rejected. Respectfully submitted, John W. Walker, P.A. 1723 Broadway Little Rock, AR 72206 By:^ in W. Walker CERTIFICATE OF SERVICE I do hereby state that a copy of the foregoing was delivered to all counsel of record via U.S. mail on this January, 1996. day of in W. Walker LITTLE ROCK SCHOOL DISTRICT 810 WEST MARKHAM STREET LITTLE ROCK, AR 72201 Februar)' 22, 1996 TO: Board of Directors FROM
Fred L.^ Smith. Manager of Support Services III. Ily j^^iik^rfis. THROUGH: Henn/ i. Superintendent of Schools SUBJECT: ServiceMaster Questions The following information is being provided in response to concerns raised by Ms. Gee (list anached) and Ms. Pondexter
 Section 6.6 of the ServiceMaster contract is attached.  Item #2 of Ms. Gees list - ServiceMaster will receive no more than the contract amount. Any additional savings below the SI0.8 million budget amount will remain with the District.  Item #3 of Ms. Gees list - It was agreed that within 40 days no adjustment to the 1995-96 budget would be made since we would only be charged a pro-rated amount for the first year of the contract.  Item #4 of Ms. Gees list - Four (4) payments have been made to ServiceMaster for the months of October, 1995, through January, 1996.  Item #5 of Ms. Gees list - The 571,213 per month is the amount to satisfy the guarantee since ServiceMaster is required to provide actual documentation to support the supplies and equipment cost.  Item #6 of Ms. Gees list - Based on actual expenditures for the past several years, the 1995- 96 budget amount provides a realistic baseline.  Item i7 of Ms. Gees list - Attached is a schedule that shows the $10.8 million. With respect to the energy savings, the effect of the energy savings programs has already been included in the 1995-96 budget. It is true that a mild winter would have a positive impact on guarantee compliance. The converse is also true. A harsh winter would have a negative impact on guarantee compliance. Item #8 of Ms. Gees list - It is probably not possible to list all potential points of concern. However, we do have a detailed budget and Exhibit A is a part of the contract.  Item #9 of Ms. Gees list - The OEM system would oniy enhance, not conflict with, the Distncts system. cc
Doug Eaton Jerry Compton FLS:caLittle Rock School District 1995-9S Budget Analysis Function Function Descriotion 2539 Other Facilities Acq &Co 2542 Upkeep of Buildings 2541 Service Area Direction 2544 Upkeep of Equipment 2545 Vehicle Maintenance 2548 Asbestos Program Magnet Schools Substitutes Amount $240,213 8,924,431 201,085 12,800 53,200 61,338 1.076,870 200,000 Total $10.779,937LRSD ADMIN. EULDING I Fax:1-bO1-324-2032 Mar 14 96 11:32 P. 02/02 If IriTLE Rock School Distioci' SPECr\L board meeting March l-l, 1996 For more information. Suellen Vann. 324-2020 Ihe Board of Directors of the Liuie Rock School District (LRSD) will hold a spec?! Board meeting tonight at 5:00 p.m. in conjunction with the monthly agenda meeting. The special meeting wail include 'eports on trie old Forest Heights building. ServiceMaster, custodian turnover, substitute office business case, approval of the 1996- 97 proposed budget, student hearings, and a personi.el issue. Both meetings will be held in the Board Room of the LRSD Administration Building, 810 West Markham. SilO Wc'il Markliam Sirc*
! Liltle Kock, Vrkan!,i4>i 73301  {,=501)334^-3&0n LITTLE ROCK SCHOOL DISTRICT 810 WEST MARKHAM STREET LITTLE ROCK, AR 72201 March 14, 1996 CONriDENTIAL TO: Board of Directors FROM: Hej Imams, Superintendent of Schools SUBJECT: ServiceMaster Contract As requested by the Board at the February meeting, ServiceMaster will be responding to concerns raised by custodians at tonights meeting of the Board. District staff responsible for administering the ServiceMaster contract has expressed some concern to me about the administration of this contract. I have attached a copy of a memo from Mr. Eaton and Mr. Smith that details those concerns. I agree that if the ServiceMaster contract is to fail, it should be ServiceMasters fault and not the Districts. This way, we will have the full force of the contract in our favor. cc: Fred Smith Doug Eaton Charlie NealTO
FROM: throug
SUB J
DATE: I am LITTLE ROCK SCHOOL DISTRICT PLANT SERVICES 3601 SOUTH BRYANT STREET LITTLE ROCK, ARKANSAS (501) 570-4020 72204 CONFinCNTlAL r. Henry P. Williams, Superintendent of Schools iaton, Director, Plant Services >Fred Smith, Manager of Support Services ServiceMaster Contract February 23, 1996 writing to state the position, as one of the Districts contract administrators, that the vocal objections presented by the Board of Directors with regard to the ServiceMaster contract is placing the administration in a most precarious situation with regard to the legal enforcement of this contract. While it is a matter of record that the Board did not vote unanimously for this contract, it is also a matter of record that the Board did approve the entering of this contract, and in doing approved its clauses and stipulations. so. While the Board most certainly reserves the right of insuring that the administration enforces the contract that they have approved, that right must be exercised in a manner which will allow us to do it within the legal parameters of contract administration. Objections to the contract, raised by Little Rock School District employees are, of course, a are, concern to those of us who are trying to administer this Board directed contract. without full investigation being provided to the Board, with regard to concerns raised by employees, the Board must adequately hear all sides of the issue before However, providing further guidance. It is difficult for us to understand what direction that they would like us to proceed. If this contract is to succeed, it must succeed with a cooperative effort between the Little Rock School District and ServiceMaster Corporation. If this contract is to fail, it must fail because of the efforts of ServiceMaster and not the Little Rock School District and if we are put in a precarious situation of not having the support to administer this contract. equally at fault in the failure. then we could be heldPage Two CONFIBCN^'*^ Continued The Board's subtle messages are being interpreted by some of our principals as non support for this contract
and that if they hold out long enough, it will go away. administer the Boards desires for this contract, For those of us trying to it is putting us in a precarious situation of having to administer a contract and to be as responsive to the school districts needs Sometimes there is a dichotomy in that situation. as possible. Unless full one hundred percent support for trying this contract exists, it is not going to be successful. I would like the opportunity to meet with you and discuss how we can proceed in administering this contract. DCE/apl/smc cc: Charlie Neal, Director, ProcurementGtroir & Gregory PROFESSIONAL ASSOOATiON ATTORNEYS AT UAW SUITC 1800 in CENTER STREET little rock. ARKAN&AS 73201 TVLCPHONC (5On 373-3000 RUfiSCLUViLUe OmCK! Ttuccewc* <&O|} (SOU 373.3A7S ti iowc3T*e- STRcrr KU^SCLLVlLLe. ARKANSAS 72801 rCLCFKONb <9011 887.7080 TELCCOAICR <8011 7 r078 March 15,1996 Mr. Jerry Malone Mr. Jim Clark Friday, Eldredge & Clark 400 W. Capitol Suite 2000 Little Rock, Arkansas 72201 Re: School Board Action Regarding Custodians Schedules Thursday, March 14,1996 Gentlemen: As you may know, last night the Little Rock School Board passed a resolution that plant services employees should return to their old schedules. The motion Jor this action came following comments from several custodians regarding their new work schedules under the School Districts agreement with ServiceMaster. A discussion by the Board focused on a sentence in section 3.2(a) of the Agreement between ServiceMaster and e School which states: ServiceMaster will, upon request by the School, make recommendations in connection with wage and wage related matters, but ServiceMaster shall not make any decisions with respect to wages, hours or other working conditions for Service Employees. In taking this action, the Board has misinterpreted the contract provision with regard to the management of the service employees. When the word hours is used in the reference which is bolded above, it relates to the total hours of the service employees and in no way means the shift or assignments which ServiceMaster gives to the service employees in its duty to manage them. As it states in section 2.1(a): ServiceMaster agrees to train, manage and direct the Schools employees in the support service departments of School which are identified in Section 3.2 below (the Service Employees). conij KHIJ AVaiHH 9e/8T/cn a  :ftMr. Jerry Malone Mr. Jim Clark March 15, 1996 Page 2 As has been reported, School District officials who negotiated the Agreement wdth ServiceMaster are well aware of the fact that the ServiceMaster Guarantee (as provided for in Section 6.6 of the Agreement) was agreed to only in conjunction with the Schools agreement to allow ServiceMaster to control scheduling so as to provide for more efficient operations. The Board in taking this action has caused the School District to be in breach of its obligations under the Agreement. If the scheduling issue is of such importance to the Board and it is interested in amending the Agreement to the mutual satisfaction of the parties, then my client is certainly willing to discuss possible solutions. Otherwise, this letter shall serve as notice of the existing breach pursuant to Section 12.1 of the Agreement Consistent with said Section 12.1, if the breach of the Agreement is not cured to ServiceMasters satisfaction within 60 days, ServiceMaster fully intends to provide notice of termination at said time which would result in it being relieved of its duties under the Agreement 30 days thereafter. Please be advised that if ServiceMaster is forced to follow this course of action, it will also pursue all other remedies available to it under law. Please do not hesitate to contact me should you want to discuss this matter further. Sincerely, Joseph S. Mowe JSMjm cc: Mark Himel, ServiceMaster Management Services John Talley, Esq., ServiceMaster Management Services rno ij KHiH nvi Ava:aj O 9S Cl ge.'ST.co IN THE UNITED STATES DISTRICT COURT EASTERN DISTRICT OF ARKANSAS WESTERN DIVISION LITTLE ROCK SCHOOL DISTRICT No. LR-C-82-866 PULASKI COUNTY SPECIAL SCHOOL DISTRICT No. 1, ET AL MRS. LORENE JOSHUA, ET AL KATHERINE KNIGHT, ET AL <996 SERVICEMASTER MANAGEMENT SERVICES, A Limited Partnership a' FILED U S OI3T".iCT COURT EASTERN DISTRICT ARKA.NSAS MAR 1 1 1996 JAMES By
"-'.to .54W. McQQRMACK, ClIRK OEP CLERK PLAINTIFF DEFENDANTS INTERVENORS INTERVENORS INTERVENORS vs. AM.? 1 Q 'S MEMORANDUM AND ORDER Before the Court are a number of motions (listed in the order filed) which the Court now addresses: (1) motion of the Pulaski County Special School District ("PCSSD") to withdraw supervision from three discrete areas of the PCSSD plan [doc.#2481]
(2) motion of the Little Rock School District ("LRSD") for partial unitary status [doc.#2483]
(3) motion of the Joshua Intervenors ("Joshua") to enjoin the LRSD from entering into a service contract without following bidding procedures, requests for information and without prior involvement of Joshua [doc.#2506]
(4) motion of PCSSD to clarify the PCSSD desegregation plan [doc.#2520]
(5) motion of Joshua for the Court to set forth in detail the continuing obligations of the LRSD under the desegregation plan with respect to faculty and staff desegregation [doc.#2544]
(6) motion of PCSSD for an Order regarding portable buildings [doc.#2546]
(7) motion of LRSD for an Order dismissing this case without prejudice with respect to LRSD, PCSSD, and the North Little Rock School District ("NLRSD") [doc.#2573]
(8) motion of Joshua for reconsideration of 2 6 4 the Court's Order of December 11, 1995, and for completion of the hearing (doc.#2594]
and (9) motion of PCSSD regarding the replacement of portable buildings with permanent construction. dated October 25, 1995 (doc.#2612]. I. The Court first addresses PCSSD's. motion to withdraw supervision from three discrete areas of the PCSSD plan (doc.#2481] and LRSD's motion for partial unitary status (doc.#2483]. The PCSSD states that it has substantially complied with plan provisions regarding library media services, staff development and counseling services, while the LRSD states that it has substantially complied with LRSD plan provisions regarding Home Instructional Program for Preschool Youngsters ("HIPPY"), Rockefeller Early Childhood Program, Parkview Science Magnet Program, and Job Training Partnership Act/Summer Learning Program ("JTPA"). Both the PCSSD and the LRSD argue that the Court should withdraw supervision from these areas of the respective plans. The PCS
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