ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Tuesday, June 14, 2005

Cases: It's not about the money

California_flag_9 A foster family agency who the court thought seemed more interested in the money than in the welfare of the children lost a breach of contract claim against a foster care family, in a recent decision by the California Court of Appeals.

Hosanna Homes and Families First are both foster family agencies (FFAs) in Alameda County, California, who certify foster care families. Hosanna entered into an agreement with the Robbins family, who took in two abused and neglected children, James and Victoria, in August 1994. As part of the transfer, James was to get psychotherapy. The Robbins’s contract provided that the foster family could not contact any attorney, county child welfare worker, or any other social worker without the presence of a Hosanna rep. Later, in 1996, Hosanna decided to terminate James’s psychotherapy because it was not working, but the Robbins family disagreed. After much talk and negotiation, the Robbinses decided to "rollover" their certification to Families First, taking Victoria and James with them. Hosanna objected strongly, threatening to remove the children. Finally, all of the relevant child care players except Hosanna—lawyers, county workers, and therapists—agreed that the Robbinses should go to Family First. Hosanna sued for breach of contract and tortious interference with an economic relationship.

Hosanna raised a number of policy issues regarding the rollover, arguing that they were unlawful and created dangerous opportunities for competition among agencies, who might compete based on offering higher rates. But what struck the court was the Hosanna was not seeking to prevent the Robbinses from switching—as it should have done if it thought that the children's’ best interest was being harmed—but purely for monetary damages. Since there was no claim that the Robbinses were switching for the money, and all the disinterested parties believed the switch to be in the children’s interest, the court had no difficulty holding that there was no breach of contract involved.

Hosanna Homes v. County of Alameda Social Services Agency, 2005 Cal. App. LEXIS 911 (1st Dist., June 8, 2005).

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