Ferretti v. Nova Se. Univ., Inc.

604 F.Supp.3d 1330

Leo FERRETTI, individually and on behalf of all others similarly situated, Plaintiff,

v.NOVA SOUTHEASTERN UNIVERSITY, INC., Defendant.

CASE NO. 20-CIV-61431-RAR

United States District Court, S.D. Florida.

Signed May 23, 2022

Brenton Jeremy Goodman, Matthew David Schultz, Levin, Papantonio, Thomas, Mitchell, Echsner, Proctor PA, Pensacola, FL, Rebecca K. Timmons, Levin, Papantonio, Thomas, Mitchell, Rafferty & Proctor, P.A., Pensacola, FL, Ariana Kiener, Pro Hac Vice, Berger Montague PC, Minneapolis, MN, Patrick F. Madden, Pro Hac Vice, Berger & Montague, P.C., Philadelphia, PA, for Plaintiff.

Mendy Halberstam, Allison Gluvna Folk, David Zvi Feingold, Shayla Nicole Waldon, Jackson Lewis P.C., Miami, FL, Stephanie Leigh Adler-Paindiris, Jackson Lewis, Orlando, FL, Richard Arthur Beauchamp, Panza Maurer & Maynard, Fort Lauderdale, FL, for Defendant.

ORDER GRANTING IN PART MOTION TO DISMISS

RODOLFO A. RUIZ II, UNITED STATES DISTRICT JUDGE

For many institutions of higher education, the fight against COVID-19 was merely prelude to the legal battle waiting on the other side. Hundreds of colleges and universities have faced class actions alleging breach of contractual obligations in the wake of a global pandemic. In most cases, courts have wrestled with the question of whether the express or implied contractual terms governing the relationship between these schools and their students allowed for a mid-semester campus closure and a switch from in-person to online course delivery—actions mandated by most, if not all, state and local jurisdictions in the early days of the pandemic. What makes this case unique is that the specific terms governing the contractual relationship between Nova Southeastern University and its students allowed for the kind of flexibility in course delivery—if not closure of campus access—necessitated by COVID-19. Consequently, Defendant's Limited Motion to Dismiss First Amended Class Action Complaint ("Motion") [ECF No. 87] must be GRANTED IN PART as set forth herein.¹

BACKGROUND

The Court assumes that the parties are familiar with the factual background of this case, as set forth in the Order Denying Motion for Dispositive Relief under Florida Statute Section 768.39. [ECF No. 76]; Ferretti v. Nova Se. Univ., Inc. , No. 20-61431, 586 F.Supp.3d 1260 (S.D. Fla. Feb. 16, 2022) (" Ferretti I "). In Ferretti I , the Court weighed the effect of the Florida Immunity Statute for Educational Institutions for Actions Related to the COVID-19 Pandemic ("Immunity Statute"), Fla. Stat. § 768.39, on this action. The Court found that the Immunity Statute is substantive—rather than procedural or remedial, Ferretti I , 586 F.Supp.3d at 1270–72 —and that the Florida Legislature intended that it immunize actions taken before the bill was passed, id. at 1272. But because it substantively alters the property rights of parties to existing contracts, the Court held that the Immunity Statute is constitutionally impermissible. Id. at 1272.

In ruling on the Immunity Statute, the Court found that, under Florida law, "the legal relationship between a private university and a student is ‘solely contractual in character,’ " Ferretti I , 586 F.Supp.3d at 12722022 WL 471213, at *13 (quoting Sirpal v. Univ. of Miami , 509 F. App'x 924, 929 (11th Cir. 2013) ), and thus acknowledged that "there can be no question that a contract existed between the parties to this case," id. But owing to the limited scope of the pleadings, the Court went no further in considering the implications of this finding outside the context of the Immunity Statute. Id. at 1272. And although the Court further noted that the terms of such a contract "may be derived from university publications such as the student handbook and catalog," id. at 1270 (citing Sirpal , 509 F. App'x at 929 ; Rhodes v. Embry-Riddle Aeronautical Univ., Inc. , 513 F. Supp. 3d 1350, 1357 (M.D. Fla. 2021) ), it would have been inappropriate at that stage of the proceedings for the Court to inquire whether such terms could be derived to establish a contract for an in-person, on-campus educational experience as alleged by Plaintiff, id. at 1272.

In the wake of Ferretti I , Defendant moved to file the instant Motion with the "limited, highly focused" scope of reviewing certain terms in Defendant's written publications and determining whether they form the basis for a contract between Plaintiff and Defendant such that Plaintiff's claims can be adjudicated without the need for discovery. [ECF No. 78] at 1–2. The Court granted that motion, [ECF No. 79], and Defendant filed the instant Motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. With the aid of this additional pleading and its related briefs, the Court is now equipped to apply the rules of black-letter contract law to this case and answer dispositive questions it could not reach in Ferretti I .

ANALYSIS

Defendant moves to dismiss both of Plaintiff's claims in this action: breach of contract (Count I) and unjust enrichment (Count II). Mot. at 4, 16. The Court addresses each Count independently.

I. Breach of Contract (Count I)

"The elements of a breach of contract action are (1) a valid contract; (2) a material breach; and (3) damages." Beck v. Lazard Freres & Co., LLC , 175 F.3d 913, 914 (11th Cir. 1999) (citing Abruzzo v. Haller , 603 So. 2d 1338, 1340 (Fla. 1st DCA 1992) ). In Ferretti I , the Court found the existence of a contract based on Florida case law establishing that legal relationships between private universities and their students are contractual in character. Ferretti I , 586 F.Supp.3d at 1272 (quoting Sirpal , 509 F. App'x at 929 ). The Court stopped short of attempting to interpret the contract, which is typically inappropriate at the motion to dismiss stage. However, "where the contract ... terms are unambiguous, a court may properly consider a motion to dismiss for failure to state a claim for breach" of contract. Alhassid v. Bank of Am., N.A. , 60 F. Supp. 3d 1302, 1312 (S.D. Fla. 2014). Defendant having moved to dismiss, the Court may now examine the parties’ contract to determine whether its terms are unambiguous.

"Contract interpretation principles under Florida law require [courts] to look first at the words used on the face of the contract to determine whether that contract is ambiguous. It is well settled that the actual language used in the contract is the best evidence of the intent of the parties and, thus, the plain meaning of that language controls." Rose v. M/V "Gulf Stream Falcon" , 186 F.3d 1345, 1350 (11th Cir. 1999) (internal citations omitted); see also GE Med. Sys. S.C.S. v. SYMX Healthcare Corp. , No. 18-20922, 2021 WL 821433, at *11 (S.D. Fla. Mar. 4, 2021) (noting that it is well settled that "[w]hen interpreting a contract, the court must first examine the plain language of the contract for evidence of the parties’ intent"). Neither party alleges the existence of an integrated contract whose four corners embrace the terms of the parties’ relationship, so the Court must look elsewhere.

Under Florida law, a private university's relationship with its students is an implied-in-fact contract arising from the university's rules, regulations, regimen, and publications at the time of enrollment. Jallali v. Nova Se. Univ., Inc. , 992 So. 2d 338, 342 (Fla. 4th DCA 2008). The terms of this implied-in-fact contract "may be derived from university publications such as the student handbook and catalog." Ferretti I , 586 F.Supp.3d at 1270 (citing Sirpal , 509 F. App'x at 929 ; Rhodes , 513 F. Supp. 3d at 1357 ). Plaintiff's First Amended Class Action Complaint ("FAC"), [ECF No. 25], refers to Defendant's Graduate Catalog and Student Handbook ("Catalog") and policies, as well as the Student Enrollment Agreement signed by Plaintiff. See, e.g. , FAC ¶ 35. Because these publications are central to Plaintiff's FAC and thus ripe for consideration, the Court may examine their plain language to determine whether their relevant provisions establish unambiguous terms that support or refute Plaintiff's claims for breach of contract. See Starship Enters. of Atlanta, Inc. v. Coweta Cnty. , 708 F.3d 1243, 1252 n.13 (11th Cir. 2013).

Plaintiff asserts that he and putative Class Members contracted with Defendant for "live on-campus instruction and access to campus facilities" in the Winter 2020 term. FAC ¶ 1. Although lumped into a single count, Plaintiff essentially alleges the existence of two separate contracts with Defendant: (1) one for "live, in-person classes" in exchange for "tuition and fees," id. ¶ 116; and (2) another for "access to campus activities, facilities, resources, and services" in exchange for "separately itemized fees" or simply "fees," id. ¶¶ 4, 108. Plaintiff alleges that Defendant breached the first contract by "suspending all in-person classes" and switching to online course delivery and breached the second with the related but distinct action of cancelling or closing access to its facilities, events, and services. See id. ¶¶ 2, 110. Plaintiff does not specify precisely how much he paid in tuition and fees, nor does he delineate which separately itemized fees went toward classes and which went toward access. See id. ¶ 58.

a. Defendant's Switch from In-person to Online Course Delivery

Plaintiff cites the "Course Delivery" summary in Defendant's Catalog to support the conclusion that "face-to-face" classes were "principally" to comprise "regular classroom instruction." FAC ¶ 29. But that very summary contains the following language: "Face-to-face classes may also include some online instruction in addition to regular classroom instruction. Some assignments may be administered through internet-based sites associated with class textbooks or through the university's online course management system. Instructors will explain specific requirements for participation in online components." Mot. at 7.

Defendant contends that...