Univ. of Ky. v. Regard

670 S.W.3d 903

UNIVERSITY OF KENTUCKY, Appellant

v.Peter REGARD; Leah Ousley; Haleigh Alexandra Long; Merideth Mullin; Anna Quinn Curran; MacKenzie Putteet; and Keegan McLarney, Appellees

2022-SC-0129-DG

Supreme Court of Kentucky.

June 15, 2023

COUNSEL FOR APPELLANT: Joshua M. Salsburey, Lexington, Donald C. Morgan, Sturgill, Turner, Barker, Moloney, PLLC, William E. Thro, Shannan B. Stamper, Lexington, University of Kentucky Office of Legal Counsel.

COUNSEL FOR APPELLEE: Andre F. Regard, Lexington, Ivey L. Workman, Regard Law Group, PLLC.

COUNSEL FOR AMICI CURIAE, EASTERN KENTUCKY UNIVERSITY, MURRAY STATE UNIVERSITY, NORTHERN KENTUCKY UNIVERSITY, UNIVERSITY OF LOUISVILLE, AND WESTERN KENTUCKY UNIVERSITY: Donna K. Perry, Jeremy S. Rogers, Alina Klimkina, Louisville, August Johannsen, Lexington, Dinsmore & Shohl LLP.

OPINION OF THE COURT BY JUSTICE CONLEY

This case is before the Court upon the trial court's denial of the University of Kentucky's (the University) claim of governmental immunity. The Court of Appeals affirmed the denial. The University filed a motion for discretionary review, and we granted to determine whether the Student Financial Obligation (SFO) and accompanying documents are in fact a written contract per KRS ¹ 45A.245(1) such that governmental immunity has been waived and the underlying breach of contract claim of the Students² may proceed. Although initially under the impression that the Students’ only remaining portion of its breach of contract claim pertained to mandatory fees, both parties at oral argument represented that the trial court's dismissal of the Students’ claim pertaining to tuition is subject to a motion to reconsider, and requested this Court consider tuition in its analysis.

The record reveals the trial court did make a ruling on governmental immunity for the breach of contract claim for both tuition and fees, and the Court of Appeals did as well. Although the trial court also dismissed the breach of contract claim on the merits insofar as it encompassed tuition, because the finality of that portion of the trial court's judgment is not yet achieved, we believe our jurisdiction to consider the governmental immunity for both tuition and fees is satisfied. Breathitt Cty. Bd. of Ed. v. Prater , 292 S.W.3d 883, 887 (Ky. 2009). We emphasize, however, that our jurisdiction at this stage of the proceedings is strictly limited to the issue of governmental immunity. Id. Consequently, we express no opinion whatsoever on the merits of the underlying claim. For the following reasons, we affirm the Court of Appeals.

I. Facts and Procedural Posture

In January of 2020, the University of Kentucky began its annual spring semester, which was set to conclude in May 2020. The Students were all enrolled as full-time, on-campus students. In late February of that same year, the world gradually became aware of the Covid-19 virus, which more or less enveloped the entire globe by March. The history of the pandemic certainly needs no detailed historical overview. Reaction to the pandemic by governments was varied, but private entities as well, either by compulsion of law or voluntarily, also instituted various measures in an effort to combat spread of the virus. As part of this voluntary effort, the University, on March 23, 2020, switched all on-campus classes to an on-line format for the remainder of the Spring semester. The Students also allege in their complaint that "the campus was effectively shut down for student use and access."

The University did not make any disbursements to the Students refunding tuition or mandatory fees as a result of its action.³ On August 7, 2020, the Students filed their putative class action suit against the University for breach of contract regarding tuition and fees for the Spring 2020 semester. On August 24, 2020, the Students amended their complaint per CR ⁴ 15.01, attaching numerous documents they allege "taken as a whole, constitute the written contract for on-campus instruction and use of facilities and other benefits related to mandatory fees ...." The University filed a motion to dismiss, asserting that the documents submitted by the Students do not constitute a written agreement therefore, the University is shielded by governmental immunity. Alternatively, the University argued the Students had failed to state a claim upon which relief could be granted because they could not demonstrate a breach of any promise made by the University.

The trial court ruled on the issue of governmental immunity that there was a written contract within the scope of KRS 45A.245(1) because of the SFO, and that the other documents submitted by the Students "reinforce[s] the terms of that contract and the expectations of the parties...." Thus, the breach of contract claim is not barred by governmental immunity. It further ruled that the breach of contract claim is not barred by governmental immunity because the Students were seeking refunds of money paid to the University, and not money from the state treasury. The trial court dismissed the Students’ claim for unjust enrichment because governmental immunity has not been waived for unjust enrichment claims. Finally, it also dismissed the Students’ breach of contract claim pertaining to tuition—holding the Students still received instruction, grades, and academic credits despite the shift to an on-line format.

The SFO was presented to the Students in an on-line format via a registration portal. They were required to agree to the SFO before proceeding with registration. In pertinent part, the SFO states

Please read the following statement and then click the accept button at the bottom of this page to continue the registration process.

...

Request and completion of registration constitutes a contractual financial obligation to pay tuition and fees for which I am liable. I am responsible for reading and understanding the current Drop/Refund policy of the University as it appears in the current Schedule of Classes. Permission to cancel enrollment does not constitute, nor shall it be construed as, a waiver by the University of my financial obligation. I understand that any financial assistance I receive will be applied against my billed charges to reduce my financial obligation.

(Emphasis added).

The University Bulletin (the Bulletin) was also provided to the Students during the registration process. The Bulletin sets out, in pertinent part, the tuition and mandatory fee rates. These rates vary according to a student's status as full-time or part-time student; whether they are an undergraduate, graduate, or a professional school student; the program enrolled in; whether they live on-campus or off-campus; and whether they are attending at least one class on-campus as opposed to taking only on-line classes. Undergraduate, full-time, resident students were charged $6,180.00 per semester. The on-line learning rate fee for students with at least one on-campus course were charged $601.00 per credit hour. Students with no on-campus courses were charged an online learning rate per credit hour of $570.00. Footnote 2 to the Bulletin states "Unless stated otherwise, the full-time per semester rates will be charged to undergraduate students enrolled for 12 credit hours or more ...."

Footnote 3 to the Bulletin states, "Mandatory fees are listed separately above and will be assessed based on the student's full-time or part-time status, course delivery mode(s), and whether or not the student is enrolled in at least one on-campus course." The "Summary of Mandatory Fees Assessed by Student Classification" in the Bulletin states undergraduates that are full-time with at least one course on-campus were charged $674.50. Full time undergraduates with no on-campus courses were charged $128.50. A total of eighteen different products or services are listed pertaining to what the mandatory fee is going towards. The exact breakdown of costs is not pertinent here, but we highlight some of the more notable products and services including: the Student Government Association; Technology; Johnson Center; Student Center; Student Center Renovation; Student Services; Transportation; Student Health Fee; and Student Wellness.

The Bulletin defines an on-campus course as "requires regular or periodic physical attendance on campus for instruction and/or assessment." It notes, however, that the "delivery modes for an on-campus course may include, but are not limited to, traditional classroom, hybrid (e.g., traditional classroom and Internet, web-based), compressed video or satellite courses." An on-line course is defined as "Internet, web-based delivery mode[,]" in Footnote 4.

The University appealed the ruling of the trial court as to governmental immunity. The Court of Appeals affirmed the ruling that the Students had a written contract with the University thus, governmental immunity had been waived. The Court of Appeals reversed the trial court's ruling that governmental immunity was not applicable because the students were only seeking a refund of money from the University, rather than from the state treasury. The Students have not appealed this ruling and we will not consider it further. Finally, the Court of Appeals made clear its ruling only pertained to governmental immunity so the trial court's dismissal of the breach of contract claim as to tuition on the merits was not within its jurisdiction.

Two key passages of the Court of Appeals’ opinion are worth highlighting. First, the Court of Appeals ruled

The University's Financial Obligation Statement is best described as a "clickwrap" arrangement, in which the user is required to "explicitly assent by clicking ‘I agree’ (or something similar) before using the website or purchasing a product." Foster v. Walmart, Inc. , 15 F.4th 860, 863 (8th Cir. 2021). "Applying ordinary contract law principles, courts routinely uphold ‘clickwrap’ ... agreements ... ‘for the principal reason that the user has affirmatively assented to the terms of

...