469 F.Supp.3d 805
W.D. Tenn.2020Background
- Concorde Career Colleges offered a Health Information Management (HIM) associate program; eleven plaintiffs enrolled at various times (2013–2016) and all graduated without programmatic CAHIIM accreditation.
- Concorde allegedly told students before/during enrollment and after graduation that the HIM program was or would be accredited, would allow graduates to sit for the RHIT exam, and (post‑graduation) promised free remedial training and a full tuition refund if accreditation was not achieved by Sept. 1, 2018.
- The HIM program achieved accreditation around Dec. 31, 2018; Concorde later offered remedial training that plaintiffs contend was inadequate or incompatible with schedules; Concorde refused refund requests after Sept. 1, 2018.
- Plaintiffs filed suit Aug. 29, 2019 (amended complaint Nov. 25, 2019) asserting seven claims: fraud, TCPA, negligent misrepresentation, promissory estoppel, breach of contract, negligence, and unjust enrichment; they seek tuition, loan interest, lost time/opportunities/earnings, treble (TCPA), punitive damages, and fees.
- Concorde moved to dismiss under Fed. R. Civ. P. 12(b)(6), principally arguing statute‑of‑limitations bars many claims and, separately, that several claims fail on the merits.
- The court (W.D. Tenn.) applied Tennessee substantive law and granted the motion in part: dismissed TCPA, negligent misrepresentation, and negligence claims; denied dismissal as to fraud, promissory estoppel, breach of contract, and unjust enrichment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Which limitations period governs breach of contract & unjust enrichment (3 vs 6 years)? | Plaintiffs: gravamen is contractual; six‑year statute (§ 28‑3‑109) applies. | Concorde: gravamen is tort/property damage; three‑year statute (§ 28‑3‑105) applies. | Court: gravamen of both claims is contractual; six‑year period governs; breach and unjust enrichment timely. |
| When did fraud/tort claims (fraud, negligent misrepresentation, promissory estoppel, negligence) and TCPA accrue under Tennessee discovery rule? | Plaintiffs: continuous misrepresentations continued until Dec. 31, 2018 (or Sept. 1, 2018), so claims accrued later and are timely. | Concorde: accrual at graduation (plaintiffs knew or should have known); claims filed Aug. 29, 2019 are untimely for pre‑graduation injuries. | Court: pre‑graduation misrepresentations accrued at graduation and are time‑barred; post‑graduation promises (e.g., June 2017 letter re: refund/remediation) that caused injury after graduation can support timely fraud and promissory estoppel; negligent misrepresentation (based on existing‑fact statements pre‑graduation) is time‑barred; TCPA claim is time‑barred. |
| Do tolling doctrines (fraudulent concealment, equitable estoppel) save untimely claims? | Plaintiffs: Concorde’s repeated assurances fraudulently concealed injuries and induced delay (esp. June 2017 refund promise), tolling statutes until Sept. 1, 2018. | Concorde: no affirmative concealment or specific inducement to delay filing suit; plaintiffs had or should have had notice earlier. | Court: neither fraudulent concealment (no specific, particularized concealment preventing discovery) nor equitable estoppel (no specific promise to refrain from asserting limitations or unequivocal promise to pay) apply; tolling denied. |
| Do fraud / promissory estoppel / breach / negligence pleadings survive Rule 9(b)/12(b)(6) scrutiny? | Plaintiffs: pleadings sufficiently particular (who/what/where/when generally alleged; June 2017 letter reproduced); allege intent on information and belief (corporate direction). | Concorde: fraud and promissory‑fraud inadequately pled under Rule 9(b) and Iqbal/Twombly; promissory estoppel duplicates contract; negligence rests on contractual duties only. | Court: fraud and promissory estoppel pleadings survive Rule 9(b) (post‑graduation promises and June 2017 letter are particularized; information‑and‑belief as to corporate direction permissible where facts in defendant’s control); breach of contract and unjust enrichment survive; negligence dismissed for failing to allege a non‑contractual duty. |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading must state a plausible claim; legal conclusions not entitled to assumption of truth)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for pleadings; threadbare recitals insufficient)
- Redwing v. Catholic Bishop for Diocese of Memphis, 363 S.W.3d 436 (Tenn. 2012) (standards for fraudulent concealment and equitable estoppel in tolling limitations)
- Benz‑Elliott v. Barrett Enters., LP, 456 S.W.3d 140 (Tenn. 2015) (use gravamen test to choose controlling statute of limitations for each claim)
- Potts v. Celotex Corp., 796 S.W.2d 678 (Tenn. 1990) (discovery rule governs accrual of tort causes of action)
- Indiv. Healthcare Specialists, Inc. v. BlueCross BlueShield of Tenn. Inc., 566 S.W.3d 671 (Tenn. 2019) (breach‑of‑contract accrues as of date of breach)