768 S.E.2d 582
N.C. Ct. App.2015Background
- Supplee enrolled at Miller‑Motte College (MMC), initially in a HIT program with the expectation he could transfer into the Surgical Technology (surg tech) program; enrollment agreements incorporated MMC’s catalog, which stated applicants would be subject to criminal background checks.
- MMC failed to run a background check at admission; months later a background check revealed dismissed felony charges and DUIs; a clinical site rejected Supplee and MMC thereafter prevented him from completing the clinical portion.
- Supplee sued MMC and Delta Career Education (DCEC) asserting breach of contract, fraud, UDTP, negligent misrepresentation, and negligence; defendants moved for summary judgment on several claims and the trial court granted summary judgment in part (striking fraud/UDTP/negligent misrep/negligence claims) but denied it as to breach of contract.
- At trial a jury found defendants breached the contract and awarded Supplee $53,481; defendants’ motions for directed verdict and JNOV were denied; defendants later unsuccessfully moved for JNOV/new trial.
- Defendants moved for sanctions against Supplee’s attorney (Nutt) after media comments about the verdict; the trial court sanctioned Nutt under Rule 3.6/3.3; the Court of Appeals reversed that sanctions order in part.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1) Whether evidence supported breach of contract such that directed verdict/JNOV should be denied | Supplee: MMC promised in catalog to run background checks; MMC breached by not performing admission check, preventing program completion | Defs: Claim is negligent‑admission/educational malpractice not cognizable; no identifiable contractual promise | Court: Denied directed verdict/JNOV — catalog term was an identifiable contractual promise; sufficient evidence of material breach submitted to jury |
| 2) Admissibility of Supplee’s income (landscaping, prior car sales) for damages | Supplee: Past and post‑enrollment earnings show lost opportunity and consequential damages; evidence was actual income, not speculative | Defs: Lost income evidence speculative/lacked reasonable certainty; McNamara/Olivetti require proof of opportunity | Court: Evidence admissible; not speculative for consequential damages (used to measure lost opportunity), trial court did not abuse discretion |
| 3) Whether summary judgment on fraud, UDTP, negligent misrepresentation, negligence was proper | Supplee: Defs knowingly misrepresented intent to perform checks and omitted material facts about clinical site discretion; negligent misrep and negligence arise from failure to run checks | Defs: No evidence of intent to deceive; breach is contractual only; negligent‑admission tort not recognized; duties arose from contract | Court: Affirmed summary judgment — insufficient evidence of intent for fraud/UDTP; negligent admission/tort claims barred where duty arises solely from contract; negligent misrep fails because duty was contractual |
| 4) Whether trial court properly sanctioned attorney Nutt for extrajudicial statements under Rules 3.6/3.3 | Plaintiffs/Nutt: Statements were within Rule 3.6(b) safe harbors or post‑verdict so could not prejudice; not false or contradictory | Defs: Nutt’s media statements disclosed nonpublic, prejudicial information and mischaracterized similarity of cases; harmed Thomas’ pending trial | Court: Reversed sanctions — many statements were public record or protected (including basis/amount of damages); post‑verdict comments could not prejudice concluded trial; no violation of Rule 3.3 shown; trial court abused discretion |
Key Cases Cited
- Ross v. Creighton Univ., 957 F.2d 410 (7th Cir.) (educational contract claims are limited; plaintiff must point to an identifiable contractual promise separate from claims of educational malpractice)
- Ryan v. Univ. of N.C. Hospitals, 128 N.C. App. 300 (N.C. Ct. App.) (breach‑of‑contract in educational settings actionable where specific contractual promise alleged)
- McNamara v. Wilmington Mall Realty Corp., 121 N.C. App. 400 (N.C. Ct. App.) (lost future profits for new businesses require proof with reasonable certainty; speculative formulas insufficient)
- Olivetti Corp. v. Ames Bus. Sys., Inc., 319 N.C. 534 (N.C.) (to recover lost opportunity profits, plaintiff must show there was in fact an opportunity; damages must be proven with reasonable certainty)
- N.C. State Ports Auth. v. Lloyd A. Fry Roofing Co., 294 N.C. 73 (N.C.) (contract breach generally does not give rise to tort liability except in limited categories where a duty exists independent of the contract)