Habegger v. Owens Community College
2017 Ohio 2693
| Ohio Ct. Cl. | 2017Background
- Plaintiffs were students in Owens Community College’s RN associate program; the college catalog (2008–2010) listed the program as accredited by the National League for Nursing Accrediting Commission (NLNAC).
- NLNAC placed conditions in 2007 and, in July 2009, voted to deny continuing accreditation; Owens announced the loss of NLNAC accreditation to students on September 26, 2009. The program remained approved by the Ohio Board of Nursing and graduates remained eligible to sit for the NCLEX.
- Plaintiffs sued Owens for breach of contract (and related claims); the court granted summary judgment for Owens on several claims and the appellate court reversed as to breach of contract, remanding to determine for each plaintiff whether (1) a breach occurred and (2) whether damages (including diminished earning capacity) were provable.
- On remand the court found a contractual relationship existed as reflected in the catalog and that NLNAC accreditation could be a material term; it identified subsets of plaintiffs who either were not enrolled at the critical time or failed to meet academic requirements and therefore could not show performance or harm.
- The court held that, although some plaintiffs established existence of a contract, plaintiffs failed to produce admissible expert evidence of lost earning capacity—vocational expert opinions were speculative and did not quantify losses with reasonable probability; emotional/distress damages were not recoverable for breach of contract absent special circumstances.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did a contract exist and did the catalog make NLNAC accreditation a material term? | Catalog representations created contractual expectations that graduates would receive an NLNAC-accredited degree. | Catalog statement was a descriptive statement of current status, not a promise guaranteeing continued accreditation (and disclaimers applied). | Contract existed; catalog language could be read as creating an expectation of continued accreditation—genuine issue of fact on materiality for students enrolled between July 30 and Sept. 26, 2009. |
| Did plaintiffs perform (i.e., were they enrolled and met program requirements)? | Plaintiffs who were enrolled and met requirements performed. | Several named plaintiffs either were not enrolled at the relevant time or failed academically and thus did not perform. | Summary judgment for Owens as to plaintiffs who were not enrolled or who failed to meet academic requirements. |
| Was there breach by defendant when NLNAC accreditation was revoked? | Revocation of NLNAC accreditation breached the catalog term and thus the contract. | Loss of accreditation did not constitute a contractual breach given catalog’s descriptive nature and disclaimers. | Reasonable minds could find a breach for students enrolled during the relevant period; breach issue survives for those students. |
| Did plaintiffs prove damages (diminished earning capacity or other economic loss)? | Plaintiffs’ experts opined loss of earning capacity and reduced educational/transfer opportunities due to non‑accredited degree. | Expert opinions were speculative, lacked quantified before/after earnings, and no empirical link between NLNAC accreditation and earnings; many plaintiffs never graduated or passed NCLEX so no harm shown. | Plaintiffs failed to meet the standard: expert testimony was speculative (not stated to a probability standard) and could not quantify lost earning capacity; emotional/distress damages not recoverable for ordinary breach of contract. Summary judgment for Owens. |
Key Cases Cited
- Gilbert v. Summit Cty., 104 Ohio St.3d 660 (2004) (summary judgment standard and construction of Civ.R. 56)
- Temple v. Wean United, Inc., 50 Ohio St.2d 317 (contract construction principles)
- Kostelnik v. Helper, 96 Ohio St.3d 1 (definition of contract and contract law principles)
- Behrend v. State, 55 Ohio App.2d 135 (Ohio precedent recognizing lost earning capacity as measurable damages)
- Stinson v. England, 69 Ohio St.3d 451 (expert causation must be stated in terms of probability)
- Kishmarton v. William Bailey Constr., Inc., 93 Ohio St.3d 226 (emotional-distress damages are generally not recoverable for breach of contract absent special circumstances)