PASS Gets Pretrial Ruling For Nearly $300K

By Lawrence Hurley
Daily Record Legal Affairs Writer

September 10, 2003

A nonprofit group specializing in finding jobs for people on welfare has taken first blood in its legal battle against the city of Baltimore, obtaining partial summary judgment in the breach of contract suit scheduled for trial next week.

Baltimore City Circuit Judge Thomas E. Noel’s decision, issued late last month, means the city will have to pay Peoples Alternative Service Systems Inc. (PASS) $298,768 that the organization says is just part of the money it is owed after the city decided to terminate its contract in May 2002.

The ruling resolves just one of five counts in PASS’ suit, which could be worth an additional $1 million if the group triumphs at trial, according to its executive director, Don Hillman.

“We are not angels, but we were serious about giving services to people in the city,” Hillman said yesterday. “We could still be there getting jobs for people.”

PASS signed a contract with the Mayor’s Office of Employment Development in August 2000 in which it agreed to administer the welfare-to-work program in Northwest Baltimore, Hillman explained.

As part of the contract, PASS worked on a performance-related basis, earning compensation for each job placement.

In its lawsuit, PASS claimed that even though it completed the work, the city refused to pay, and then terminated the contract.

Hillman’s lawyer, Ronald V. Miller, yesterday poured scorn on the city officials involved, describing them as “little Napoleons” who “rule by edict” whenever possible. [Editor's note: this was a dumb thing to say.]

“There’s no way to call them out unless you do what we did,” he said.

Hillman added that he believes senior officials may not have received accurate information about the success of PASS’ work, which he said put 200 people in unsubsidized jobs in 20 months.

However, he did admit that he has “a little bit of an attitude,” which did not go down well at City Hall and was, he claims, the main reason why the contract was terminated.

In addition to two counts of breach of contract (one of which Noel ruled on), the suit also alleges that Karen Sitnick, the director of the employment development office, made “intentional, false, and improper” statements that led to PASS losing a $691,000 contract with the Empower Baltimore Management Corp.

PASS also claims that the city’s decision to terminate its contract because of alleged poor performance was without basis, on the grounds that “PASS was the best performer of all the subcontractors receiving welfare-to-work funds,” according to the suit.

As a result, PASS argues that it is owed the $457,000 remaining on the contract.

Diana Spencer, a spokesperson for the city agency, declined to comment because of the impending trial.

Trial is set to begin on Monday.

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