516 F.Supp.3d 958
D. Ariz.2021Background
- Plaintiff Carson Little, a Grand Canyon University (GCU) student, paid room, board, meal plan, and student fees for Spring 2020 and left campus after GCU moved most classes online in March 2020.
- GCU announced campus restrictions and encouraged (and effectively required absent a waiver) most students to leave; many campus facilities and services were closed or curtailed.
- GCU offered limited housing credits ($260–$450 depending on dorm) for students who moved out by March 25 and rolled over "Dining Dollars" to the next semester; it did not issue general refunds for fees.
- Little sued on behalf of two classes (Room & Board Class and Fee Class) asserting breach of contract, unjust enrichment, and conversion seeking prorated refunds/disgorgement.
- GCU moved to dismiss under Rule 12(b)(6); the court denied dismissal as to breach of contract and unjust enrichment claims but dismissed conversion claims with prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of contract — sufficiency of pleading | Little: alleged existence of contracts to provide housing, meals, and services and that GCU failed to provide them after campus closure | GCU: no specific contract terms identified; refunds deadlines passed; campus continued providing services to those who stayed | Court: Plaintiff plausibly alleged contracts, breach, and damages; breach claims survive at pleading stage |
| Unjust enrichment — elements met under Arizona law | Little: paid for services not provided; GCU retained funds and offered inadequate credits; no justification for retention | GCU: no unjust enrichment or impoverishment alleged | Court: allegations suffice to state unjust enrichment claims for housing/fees; claim may proceed |
| Conversion — viability as to money/fees | Little: seeks return/disgorgement of funds paid | GCU: conversion improper because claim seeks recovery of a debt; funds not segregated/identifiable | Court: conversion claims fail because money was not shown to be specifically identifiable or subject to an obligation to treat it specially; dismissed with prejudice |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must allege enough facts to state a plausible claim)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard requires more than conclusory allegations)
- Case Corp. v. Gehrke, 208 Ariz. 140 (App. 2004) (conversion cannot be used to collect a general debt; money must be identifiable)
- Autoville, Inc. v. Friedman, 20 Ariz. App. 89 (1973) (money may be subject to conversion if describable/segregated and obligated to be treated specifically)
- Perez v. First Am. Title Ins. Co., 810 F. Supp. 2d 986 (D. Ariz. 2011) (elements of unjust enrichment under Arizona law)
- Balistreri v. Pacifica Police Dep’t, 901 F.2d 696 (9th Cir. 1988) (12(b)(6) dismissal appropriate for lack of cognizable legal theory)
- Pareto v. FDIC, 139 F.3d 696 (9th Cir. 1998) (conclusory legal allegations insufficient to defeat a motion to dismiss)