Supreme Court Ruling Delivers Victory for Students with Disabilities

In a unanimous decision, the U.S. Supreme Court paved a new route for students with disabilities to hold schools responsible—and now, recover damages—when a school fails to provide adequate educational accommodations. In Perez v. Sturgis Public Schools, the Court held that students with disabilities are not required to exhaust their administrative remedies under the Individuals with Disabilities Education Act (IDEA) when the plaintiff is also seeking monetary relief under the Americans with Disabilities Act (ADA) for prior discrimination or mistreatment by the school.

Miguel Luna Perez attended public school in Sturgis, Michigan from ages 9-20.  Speaking with reporters, Perez said that during his time in the Sturgis Public Schools, he received “some sign language,” but he wanted more. There was one other deaf student at his school. However, lacking resources and support, the two deaf students could not communicate with each other, much less the rest of the school. According to Perez, “nobody interpreted for me at Sturgis.”

Settling Perez’s IDEA claim, Sturgis schools agreed to send Perez to the Michigan School for the Deaf, where annual tuition exceeds $40,000, and pay for his post-secondary education so that Perez and his parents could learn sign language. The IDEA settlement resolved Perez’s needs moving forward but did nothing to address his prior mistreatment. To obtain compensation for past harm, lost income and damages for emotional distress, Perez sued under the ADA.

Both the ADA and the IDEA protect children with disabilities. Under the IDEA, students with disabilities can petition their school to enact reasonable, additional educational accommodations. But the IDEA does not permit recovery of money damages or remedy prior discrimination or mistreatment of a student with disabilities. Aside from the ADA, no such law provides relief to the nearly 7.5 million students with disabilities in the U.S. This was until Perez decided to challenge his school.

“The question [before the Court] is whether a plaintiff must exhaust administrative processes under IDEA that cannot supply what he seeks,” Justice Gorsuch wrote. “We answer in the negative.” Perez, who graduated from the Michigan School for the Deaf in 2020, said that he “learned so many new words and signs [and] learned construction.” Still, he said, “I wish I could have gone to college. I don’t have a job, but I want to have one. I want to make my own choices.”

Nebraska Contract and Judgment Interest Explained

In Becher v. Becher, a recent Nebraska Supreme Court opinion, the Court outlined the general rule for judgment interest and explained when courts may award judgment interest.  311 Neb. 1 (2022).  In sum, courts hearing equitable claims—which are claims seeking something other than money damages—may award or withhold interest as the court deems reasonable and just, except where a party is entitled to interest “as a matter of right.”  Id. at 16.  This raises the question: when is interest recoverable “as a matter of right,” and at what rate?   

Under Nebraska law, interest is generally recoverable “as a matter of right” in loan default and breach of contract claims. 

Loan default claims:  recoverable interest is usually outlined in the loan agreement.  A party may contract to borrow or loan money at any rate of interest not exceeding 16% per year.  Neb. Rev. Stat. § 45-101.03.  This limitation does not apply to loans to a corporation, partnership, LLC, or trust (or to a person or entity guaranteeing a loan to the same), or loans in excess of $25,000 payable to a single creditor.  A “fallback” interest rate of 6% per year applies where no interest rate is mentioned in the loan or contract.  § 45-102.

 Breach of contract claims: interest is divided into two categories: Pre-judgment interest and post-judgment interest.   

Pre-judgment interest accrues from the time a party breaches the contract until the date judgment is entered.  There are “three ways to recover pre-judgment interest, and none is preferred.”  Pre-judgment interest may be recovered on (a) liquidated claims, (b) unliquidated claims, and (c) liquidated or unliquidated breach of contract or quasi-contract claims.  Weyh v. Gottsch, 303 Neb. 280, 314 (2019). 

Liquidated claims—where there is no dispute as to the amount owed—interest is recoverable at the post-judgment interest rate set forth in § 45-103 (explained below).  § 45-103.02(2).  

Unliquidated claims—interest is recoverable if four conditions are met:  (1) a written offer must be made and mailed to defendant to allow judgment on the terms stated in the offer; (2) the offer must be made no less than ten (10) days prior to trial; (3) a copy of the offer and return receipt must be filed with the clerk of court where the action is pending; and (4) the offer is not accepted prior to trial or within thirty (30) days of the date the offer was made, whichever occurs first.  Neb. Rev. Stat. § 45-014.  When all four conditions are met, pre-judgment interest may be recovered at the post-judgment interest rate outlined in § 45-103 (explained below).  

Here’s the real kicker: Interest on liquidated or unliquidated breach of contract or quasi-contract claims is recoverable at a rate of 12% per year if the claim is (1) a claim on any instrument in writing (like a contract); (2) to settle an account from the date the balance is undisputed (when the breaching party agrees they owe the amount); (3) on unjust enrichment claims; or (4) on money owed and unreasonably withheld.  § 45-014. 

Post-judgment interest: Effective January 20, 2022, the statutory judgment interest rate in Nebraska is 2.223% per annum. As the name implies, post-judgment interest begins to accrue from the date judgment is entered and continues until the judgment amount, plus accrued interest, is paid in full. This rate is adjusted regularly by the Nebraska State Court Administrator to be “two percentage points above the bond investment yield” for 26-week United States Treasury Bills. § 45-103.

E|S Successful Before Nebraska Supreme Court In Construction Site Accident Case

In Porter v. Knife River, Inc., the Nebraska Supreme Court affirmed the district court for Thurston County’s grant of summary judgment to D.P. Sawyer, Inc., a traffic control and highway striping company. 310 Neb. 946 (2022).  Erickson | Sederstrom’s attorneys aided in the summary judgment and appeal process. 

In the case, the administrator of decedent’s estate sued D.P. Sawyer, along with several other construction contractors, alleging negligent maintenance of a construction site.  The administrator’s claim arose when an Omaha Tribal Police officer bypassed warning signals and road barricades along a highway closed for construction.  The officer then tragically collided with a large crane parked on the closed highway.  The administrator argued the contractors were liable for negligence because the crane was left on the highway without adequate illumination, barricades, or other traffic control, which allegedly caused decedent’s death. 

E|S attorneys argued defendants were entitled to summary judgment because the administrator failed to prove a prima facie case of negligence and that the decedent assumed the risk of harm involved when he bypassed the road barricades.  The Honorable John E. Samson, District Judge, agreed, granting summary judgment in favor of the defendants.  The administrator appealed.

The Nebraska Supreme Court affirmed the district court’s grant of summary judgment, determining that barricades placed at the termini of a closed highway need not absolutely prevent entrance to the construction area.  Highway contractors are not statutorily required to place additional signals at the termini of a closed highway notifying drivers that the highway utilizes dangerous machinery and may contain potential defects.  This is because warning signals and barricades at the termini thereof already give drivers notice that the highway is under construction and the condition of the highway itself shows that it is under various stages of completion. 

Accordingly, the Nebraska Supreme Court upheld the district court's order granting summary judgment because they offered evidence showing they exercised ordinary care under Nebraska law. 

Erickson | Sederstrom’s experienced litigation group has a long history of success in defending claims arising out of construction projects, vehicle accidents, and all types of injury accidents.  Ross M. Serena or E|S’s litigation attorneys can be reached at 402-397-2200.

Thanks to E|S law clerk Rob Toth for his assistance in preparing the above analysis!

Anticipated Changes for Landlords & Tenants Due to Covid-19

Considering the current state of affairs and the imminent expiration of Nebraska’s Temporary Residential Eviction Relief Executive Order, it is important for landlords and tenants to become informed of their duties and the potential for additional exposure to new claims on the horizon arising from circumstances surrounding COVID-19. This article is not meant to be an exhaustive discussion in that regard. Rather, I wish to provide an illustrative list of some of those duties and issues surrounding them which could be affected by the anticipated post-pandemic changes to the commercial real estate market.  

It is well founded in Nebraska law that landlords have a duty to mitigate damages following an abandonment, or any other breach of the lease which leads to a vacant unit in order to maximize their recovery of damages. See Hilliard v. Robertson, 253 Neb. 232, 570 N.W.2d 180 (1997). The satisfaction or not of this duty is fact dependent, but proof of the affirmative defense for breaching tenants does not currently require expert evidence, and even in cases where the landlord has erected marketing signage to relet the premises, Nebraska courts have held that such was insufficient to meet this common law duty. Id. In light of the expected shifts in the commercial real estate market due to the growth of implementing work-from-home strategies, and the eventual corrections likely to follow the sunset of governmental lending and grant programs, this duty and the issues tangential to it should be expected to be litigated frequently. Both landlords and tenants should pay close attention to that litigation as there are likely to be arguments which could alter the proof requirements as well as the duty itself in the coming months to account for a more volatile and shifting market space. 

Nebraska courts have also long held that commercial tenants have a duty to protect lawful entrants to the premises from foreseeable dangers in arrangement and use of his premises. Hansen v. First Westside Bank, 182 Neb. 664, 156 N.W.2d 790. Provided further, in some circumstances, liability for a patron’s injuries can even be extended to commercial landlords. See Reicheneker v. Seward, 203 Neb. 68, 277 N.W.2d 539 (1979). In particular, if a lease is not artfully crafted, or if a landlord fails to address issues that he is put on notice of by his tenant and which create an unreasonable risk of harm to patrons, then liability can be extended to the landlord as well as his tenant for injuries which occurred as a result of those issues. Id. But what does this mean regarding the potential for exposure to tenants and landlords with regard to claims based on contracting COVID-19?   

If landlords had no duty to protect their tenants or their tenant’s patrons, then they could save time and resources by demonstrating a hands-off management approach.  Alex J. Schnepf, A Covid-19 Heavyweight Bout Tenant Safety Versus Discrimination, 35 Prob. & Prop., 24, 25 (2021).  However, the absence of a duty to keep tenants safe is not a reality in many states because of the implied warranty of habitability.  Id.   

In Nebraska, the implied warranty of habitability creates a duty for landlords to maintain habitable conditions on their rental properties by ensuring the premises be safe for the health of the tenants.  For example, landlords must “do whatever is necessary, after written or actual notice, to put and keep the premises in a fit and habitable condition.”  Neb. Rev. Stat. Ann. § 76-1419 (West 2001).  The implied warranty of habitability and limited circumstances for the imputation of premises liability discussed above could theoretically create exposure for landlords who fail to reduce the spread of COVID-19 throughout their rental properties.  See Schnepf, Safety Versus Discrimination, supra; see also Reicheneker, Supra. 

It is foreseeable the assurances of the implied warranty of habitability and limited circumstances of imputation of premises liability may be extended to encompass protecting tenants and their patrons from spreading COVID-19 because the virus presents a direct threat to public health and safety.  It follows that an outbreak of the virus on rental properties could render a property uninhabitable and poses the real threat of substantial lawsuits amongst and against tenants and landlords alike.  What steps should landlords take to ensure the safety of their tenants and the habitability of their rental properties?   

Should landlords of commercial rental properties require their employees to receive vaccinations to mitigate the spread of COVID-19?  The Equal Employment Opportunity Commission states that employers may implicate vaccination policies as a qualification for employment.  The Occupational Safety and Health Administration suggests employers have the vaccine available to eligible employees, either at no or low cost, and supplemental information about the vaccines.  See ABA, COVID-19 Vaccines Prompt Different Questions for Employers and Employees (Feb. 20, 2021), available at https://www.americanbar.org/news/abanews/aba-news-archives/2021/02/covid-19-vaccines-prompt-different-questions-for-employers-and-e/. 

Who is exempt from an employee mandated vaccine?  Employers must engage in a process that considers reasonable accommodations for individuals with disability, those that are susceptible to the vaccine, or someone who has a religious objection.  If an employer is unable to make a reasonable accommodation to an employee, they should consider granting leave to the employee.  In doing so, employers should consider the following: Can the employee be granted a period of leave until the threat of COVID ceases?  Is the employee eligible for leave under the Family Medical Leave Act?  Does the employer have generally applicable workplace leave policies that could be used to allow the employee to take leave until the situation in the country changes?  Id.   

The impact of COVID-19 has created a less than favorable housing situation for tenants and landlords alike.  Nebraska’s Temporary Residential Eviction Relief Executive Order, acting as a moratorium on evictions, is set to expire on May 31, 2021.  Further, the Center for Disease Control’s eviction moratorium shall expire after June 30, 2021.  When these moratoriums lapse, an influx of evictions is likely because of COVID-19’s impact on employment, health, and the overall economy.  See Claire Corea, Tenants’ Right: The Law on Paper Versus the Law in Practice, 47 Rutgers L. Rec. 226, 254 (2020). Likewise, as the funds from governmental programs which have subsidized the market begin to run out, and as more companies continue to implement work-from-home strategies, it could reasonably be expected that the availability of replacement commercial tenants to fill those spaces would be less abundant than in recent years. Therefore, it is important for landlords and tenants alike to be aware of not only the market shifts, but also the changes in their duties and potential exposure to liability stemming from the resulting litigation.