Case Information
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-------------------------------------------------------------x
TONI FIORE, JADE D’AMARIO, SEAN DUNN,
and JOSHUA DUNN on behalf of themselves and
all others similarly situated, OPINION & ORDER
Plaintiffs, No. 20-CV-3744 (CS) - against - THE UNIVERSITY OF TAMPA,
Defendant.
-------------------------------------------------------------x
Appearances:
Philip L. Fraietta
Alec M. Leslie
Bursor & Fisher, P.A.
New York, New York
Sarah N. Westcot
Bursor & Fisher, P.A.
Miami, Florida
Counsel for Plaintiffs
Jonathan M. Kozak
Jackson Lewis P.C.
White Plains, New York
Felice B. Ekelman
Ryan C. Chapoteau
Jackson Lewis P.C.
New York, New York
Counsel for Defendant
Seibel, J.
Before the Court is Defendant’s motion to dismiss the Amended Complaint under Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure. (ECF No. 19.) For the following reasons, Defendant’s motion is GRANTED in part and DENIED in part.
I. BACKGROUND
For purposes of the motion, I accept as true the facts, but not the conclusions, set forth in Plaintiffs’ Amended Complaint. (ECF No. 16 (“AC” or “Amended Complaint”).)
Facts This case concerns the transition from in-person to remote instruction at the University of Tampa (“UT”) during the spring 2020 academic semester in response to the COVID-19 pandemic. (AC ¶ 1.) Plaintiffs Jade D’Amario of New York and Joshua Dunn of Connecticut (“Student Plaintiffs”) were enrolled as full-time undergraduate students at UT during the spring 2020 semester. ( Id. ¶¶ 20, 23.) Plaintiffs Toni Fiore of New York and Sean Dunn of Connecticut (“Parent Plaintiffs”) are parents of full-time undergraduate students who were enrolled at UT during the spring 2020 semester. ( Id. ¶¶ 19, 22.) Defendant UT is a private university located in Tampa, Florida. ( ¶ 25.)
Undergraduate tuition at UT for the spring 2020 semester was approximately $14,401, and full-time undergraduate students were charged mandatory fees of approximately $2082. ( Id. ¶¶ 32-33.) Parent Plaintiffs Fiore and Dunn paid UT approximately $11,205 and $12,500, respectively, for tuition, fees, meals, and housing on behalf of their respective children for the spring 2020 semester, ( id. ¶¶ 19, 22), and Student Plaintiffs D’Amario and Dunn paid UT approximately $8,000 and $7,000, respectively, in tuition, fees, meals, and housing for the spring 2020 semester, ( id. ¶¶ 20, 23). The fees paid by Student Plaintiffs included a “mandatory
Student Service Fee,” which “[p]rovides support for a number of student services, programs and activities,” as well as a “mandatory Student Government Fee,” which “[p]rovides basic support to student government, student productions, publications and other student-sponsored organizations.” ( Id . ¶ 63 (cleaned up).) None of the named Plaintiffs have received a refund of tuition or mandatory fees for the spring 2020 semester. ( Id . ¶¶ 19-20, 22-23.)
Before paying tuition or registering for classes for the spring 2020 semester, the Student Plaintiffs each consulted Defendant’s online Course Catalog and its online Course Schedule Search and Registration tool. ( Id . ¶¶ 3, 21, 24, 35.) The Course Catalog, which detailed every course offered, only mentioned online instruction for two courses and had a search function that allowed students to search by “Method,” with options including “General Classroom,” “Hybrid,” “Independent Study,” “Internship,” and “Online.” ( Id. ¶ 4.) UT’s Course Schedule Search listed the “Delivery Mode” as “In-Person” for each of the courses for which the Student Plaintiffs registered for the spring 2020 semester. ( Id. ¶¶ 5-6.) They also received course schedules and course-specific syllabi listing the on-campus building and room where each course was to be held. ( Id. ¶¶ 7-8.) They allege that they registered for classes and paid tuition with the understanding – based on representations in some of these materials – that their courses would be taught in-person. ( Id . ¶¶ 21, 24, 35.)
UT’s spring semester ran from January 21, 2020 through May 8, 2020. ( Id. ¶ 30.) The last academic day before the school’s Spring Break was March 6, 2020. ( Id. ¶ 38.) During Spring Break, on March 11, 2020, UT announced that all classes would move to online and remote instruction in response to the COVID-19 pandemic. ( Id. ¶ 36.) On March 17, 2020, UT announced that the rest of the spring semester would be remote, with courses conducted online. ( ¶ 37.)
Procedural History Plaintiff Fiore filed suit on May 14, 2020, [1] bringing claims on behalf of herself and a class of similarly situated persons for breach of contract (Count I), unjust enrichment (Count II), and conversion (Count III), seeking a pro-rated return of tuition and fees paid for the spring 2020 semester. (ECF No. 1.) Defendant requested a pre-motion conference on July 31, (ECF No. 6), and on August 26, the Court held the pre-motion conference and granted Plaintiff leave to amend the complaint, (Minute Entry dated Aug. 26, 2020). Plaintiffs amended their complaint on September 15, 2020, (AC), and the instant motion followed, (ECF No. 19). Defendant moves to dismiss the claims of the Parent Plaintiffs for lack of standing under Rule 12(b)(1), and all claims for failure to state a claim on which relief can be granted under Rule 12(b)(6). (ECF No. 20 (“D’s Br.”).)
Between December 2020 and March 2021, the parties made several supplemental submissions regarding COVID-19 tuition cases decided after briefing was complete. (ECF Nos. 29, 30, 31, 32, 33, 34.) On July 16, 2021, Defendant requested that the Court re-open briefing so that the parties could address Florida Statute § 768.39 (the “Florida Statute” or the “Statute”), which was signed into law on June 29, 2021. (ECF No. 36.) Defendant argues the Florida Statute immunizes it against Plaintiffs’ claims and is grounds for dismissal of this case. ( ; ECF Nos. 38, 42.) The Court granted the request, (ECF No. 37), and the parties submitted supplemental briefs, (ECF Nos. 38, 40, 42). Plaintiffs’ supplemental opposition challenges the constitutionality of the Florida Statute under the United States and Florida Constitutions. (ECF No. 40.) Plaintiffs provided notice of the constitutional challenge to the Attorney General of the State of Florida, as required under Federal Rule of Civil Procedure 5.1(a). (ECF No. 41.) The Court certified the constitutional challenge to the same official as required under 28 U.S.C. § 2403(b) and Federal Rule of Civil Procedure 5.1(b). (ECF No. 43.) More than sixty days have passed since the Plaintiffs filed notice of the constitutional challenge, and the Florida Attorney General has not intervened. [2]
II. LEGAL STANDARD
Motion to Dismiss for Lack of Standing
Under Rule 12(b)(1), a district court may properly dismiss an action for lack of subject
matter jurisdiction “if the court lacks the statutory or constitutional power to adjudicate it.”
Cortlandt St. Recovery Corp. v. Hellas Telecomms., S.A.R.L.
,
Ltd.
,
Article III of the Constitution limits a federal court’s jurisdiction to actual “Cases” and
“Controversies.” U.S. Const. art. III, § 2;
see Lujan v. Defs. of Wildlife
,
Motion to Dismiss for Failure to State a Claim
“To survive a motion to dismiss, a complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is plausible on its face.’”
Ashcroft v. Iqbal
, 556
U.S. 662, 678 (2009) (quoting
Bell Atl. Corp. v. Twombly
,
than conclusions.”
Iqbal
,
In considering whether a complaint states a claim upon which relief can be granted, the court “begin[s] by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth,” and then determines whether the remaining well-pleaded factual allegations, accepted as true, “plausibly give rise to an entitlement to relief.” at 679. Deciding whether a complaint states a plausible claim for relief is “a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged – but it has not ‘shown’ – ‘that the pleader is entitled to relief.’” (cleaned up) (quoting Fed. R. Civ. P. 8(a)(2)).
When deciding a motion to dismiss, a court is entitled to consider: (1) facts alleged in the complaint and documents attached to it or incorporated in it by reference, (2) documents integral to the complaint and relied upon in it, even if not attached or incorporated by reference, (3) documents or information contained in defendant’s motion papers if plaintiff has knowledge or possession of the material and relied on it in framing the complaint . . . , and (5) facts of which judicial notice may properly be taken under Rule 201 of the Federal Rules of Evidence.
Weiss v. Incorporated Village of Sag Harbor
,
Choice of Law
Both parties have cited Florida cases and relied on Florida law to argue the Rule 12(b)(6)
motion to dismiss the claims for breach of contract, unjust enrichment, and conversion. Neither
party has disputed that Florida law governs this action. Therefore, the Court infers that both
parties have consented to an application of Florida law to decide the substantive issues in this
motion.
See Motorola Credit Corp. v. Uzan
,
III. DISCUSSION
The Court has subject matter jurisdiction pursuant to the Class Action Fairness Act, 28 U.S.C. § 1332(d).
Florida Statute § 768.39 As a threshold matter, the Court must consider the effect of the Florida Statute, which became law while Defendant’s motion was pending.
Subsection (1) of the Florida Statute sets out the legislature’s findings: The Legislature finds that during the COVID-19 public health emergency, educational institutions had little choice but to close or restrict access to their campuses in an effort to protect the health of their students, educators, staff, and communities. Despite these efforts, more than 120,000 cases of COVID-19 have been linked to colleges and universities nationwide, and the deaths of more than 100 college students have been attributed to the disease. The Legislature further finds that lawsuits against educational institutions based on their efforts to provide educational services while keeping students, faculty, staff, and communities safe during the COVID-19 public health emergency are without legal precedent. One court has even acknowledged that the “legal system is now feeling COVID-19’s havoc with the current wave of class action lawsuits that seek tuition reimbursement related to forced online tutelage.” Under these circumstances, the Legislature finds that there is an overpowering public necessity for, and no reasonable alternative to, providing educational institutions with liability protections against lawsuits seeking tuition or fee reimbursements or related damages resulting from the institutions changing the delivery of educational services, limiting access to facilities, or closing campuses during the COVID-19 public health emergency.
Fla. Stat. § 768.39(1). “Educational institution,” as defined in the statute, includes both public and nonpublic postsecondary institutions. Id. § 768.39(2).
Subsection (3)(a) of the Florida Statute immunizes any “educational institution that has taken reasonably necessary actions in compliance with federal, state, or local guidance to diminish the impact or the spread of COVID-19” from “any civil damages, equitable relief, or other remedies relating to such actions.” § 768.39(3)(a). This provision sets out a non- exclusive list of “reasonably necessary actions taken while a state of emergency was declared”: (1) “Shifting in-person instruction to online or remote instruction for any period of time;” (2) “Closing or modifying the provision of facilities, other than housing or dining facilities, on
the campus of the educational institution;” or (3) “Pausing or modifying ancillary student activities and services available through the educational institution.” Id. The Statute deems “[t]he provision of in-person or on-campus education and related services” to have been “impossible” during any time in which educational institutions were responding to COVID-19, id. § 768.39(3)(b), and all reasonably necessary actions, as defined in subsection (3)(a), are “deemed justified” due to “the various governmental orders and the need for educational institutions to protect their communities,” id. § 768.39(3)(c).
The Florida Statute also provides that “invoices, catalogs, and general publications of an educational institution are not evidence of an express or implied contract to provide in-person or on-campus education and related services or access to facilities during the COVID-19 public health emergency” in a suit against an educational institution. Id. § 768.39(4). The Statute also mandates a heightened burden of proof in COVID-19 tuition cases, providing that a plaintiff must present clear and convincing evidence that she is entitled to damages. Id. § 768.39(7). [3]
Defendant contends that, as an educational institution, subsection (3)(a) of the Florida Statute provides it with immunity from Plaintiffs’ claims, and that even without that provision, Plaintiffs’ claims are fatally undermined by other parts of the statute, including the evidentiary provision and the provision establishing a heightened burden of proof. Plaintiffs challenge the constitutionality of the Florida Statute, arguing that it unconstitutionally impairs the obligations of contract in violation of the U.S. and Florida Constitutions and violates the Access to Courts provision of the Florida Constitution. (ECF No. 40 at 1-6.) In addition, Plaintiffs challenge application of the law on the grounds that the relevant provisions were not intended to apply retroactively to pending cases, or, alternatively, that such retroactive application would unconstitutionally impair Plaintiffs’ vested rights. ( Id. at 6-10.)
The Court first assesses whether (and to what extent) the relevant provisions apply
retroactively. For a statute to apply retroactively under Florida law, the Court must determine
first “whether there is clear evidence of legislative intent to apply the statute retrospectively.”
Metropolitan Dade County v. Chase Fed. Hous. Corp.
,
1. Legislative Intent to Apply the Statute Retroactively
“It is a well established rule of statutory construction that, in the absence of an express
legislative statement to the contrary, an enactment that affects substantive rights or creates new
obligations or liabilities is presumed to apply prospectively.”
Hassen v. State Farm Mut. Auto.
Ins. Co.
,
Defendant contends that “[i]t cannot be credibly disputed that the Florida Legislature intended the [Florida Statute] to apply to existing tuition and fees litigation against colleges and universities resulting from the impact of the COVID-19 pandemic.” (ECF No. 38 at 8.) As evidence of this intent, Defendant points to the legislative finding that the “current wave” of lawsuits against universities and colleges related to those institutions’ responses to COVID-19 is unprecedented. Fla. Stat. § 768.39(1). The legislature specifically singled out “class action lawsuits that seek tuition reimbursement related to forced online tutelage.” Id. The legislature further found “an overpowering public necessity” for the immunity protections granted to educational institutions in the Florida Statute. Id. Defendant argues that dismissing this case is the only way to give effect to this legislative intent. (ECF No. 42 at 6.) The sole alternative, according to Defendant, would be a finding that the Statute applies purely prospectively, which Defendant argues would be absurd because there have been no emergency health orders in effect in Florida since the Statute became law. ( at 6-7.) Thus, according to Defendant, the Statute would be pointless because it would apply only to conduct occurring after its enactment, but the conduct it immunizes – “reasonably necessary actions taken while a state of emergency was declared for this state,” Fla. Stat. § 768.39(3) – occurred exclusively before its enactment. (ECF No. 42 at 6-7.)
Plaintiffs stress the absence of an explicit statement that the legislature intended the Florida Statute to apply retroactively, and point to the fact that the legislature considered, but failed to adopt, a retroactivity provision. (ECF No. 40 at 7-8.) An April 12, 2021 version of the bill provided:
This section shall apply retroactively to causes of actions accruing on or after March 1, 2020, the date of the declaration of the COVID-19 public health emergency by the State Surgeon General, and shall apply prospectively to causes of action that accrue before the end of the academic term during which the emergency declaration expires or is terminated. However, this section does not apply in a civil action against a particular named defendant which is commenced before the effective date of this section.
H.B. 1261 (Committee Substitute 1), 2021 Leg., 123d Reg. Sess. (Fla. 2021). The legislature later struck this language, and this section of the bill became law without it. See generally Fla. Stat. § 768.39.
Defendant is correct that Plaintiffs misconstrue this legislative history. Plaintiffs argue that it shows that “the legislature contemplated the idea of protecting those universities that are already being sued for improperly withholding student refunds, but specifically chose not to.” (ECF No. 40 at 8.) But the legislature actually considered not protecting universities that had already been sued, and chose not to. The provision that was considered and rejected specifically would not have immunized universities that had already been sued. As drafted, the discarded provision protected only universities that had not already been sued, so it being dropped could suggest either that the statute was not intended to apply retroactively at all or that the legislature intended to protect all institutions, whether or not they had already been sued. I conclude it is the latter, for the reasons that follow, but at the very least this drafting history does not support Plaintiffs’ theory.
Plaintiffs correctly argue that the Florida Statute contains no express provision stating that it is to apply retroactively, but the statutory text clearly demonstrates the legislature’s retroactive intent because it targets specific events and actions already complete at the time the Statute was passed. It addresses lawsuits brought in reaction to “institutions changing the delivery of educational services, limiting access to facilities, or closing campuses during the COVID-19 public health emergency,” Fla. Stat. § 768.39(1), and purports to immunize institutions from the consequences of “[r]easonably necessary actions taken while a state of emergency was declared for this state for the COVID-19 pandemic,” id. § 768.39(3)(a). The legislature also uses the past tense throughout the enacted Statute – for example, addressing the problem of “educational institutions [that] had little choice but to close or restrict access to their campuses,” id. § 768.39(1) (emphasis added), by immunizing any college or university that “ has taken reasonably necessary actions” and deeming in-person instruction “to have been impossible . . . during any period of time in which such institutions took reasonably necessary actions . . . to protect students, staff, and educators in response to the COVID-19 public health emergency,” id. § 768.39(3)(a), (b) (emphasis added). These passages reflect an unmistakable intent to address the ramifications of past conduct.
These passages also highlight the implausibility that the legislature intended the Florida
Statute to have no retroactive effect. Were the Court to give the Statute that meaning, it would
create the absurd result of having a law on the books that largely immunizes past conduct but has
no retroactive effect.
[4]
Courts are to avoid interpretations that would make legislation a nullity or
lead to absurd results.
See Wollard v. Lloyd’s & Cos. of Lloyd’s
,
Two possibilities remain: either the legislature intended the statute to apply retroactively
in all cases, or the legislature intended the statute to apply to past conduct so long as no action
had been filed at the time the law was passed. The latter possibility was considered by the
legislature in the April 12, 2021 draft of the bill and rejected (as recounted above).
[5]
No language
that remains in the enacted statute draws a distinction between actions already commenced as of
the date of enactment and actions commenced thereafter. Moreover, subsection (1) suggests that
the legislature is reacting to the “current wave” of class action litigation, and in doing so quotes
one such case that was decided prior to enactment.
See Salerno v. Fla. S. Coll.
, 488 F. Supp. 3d
1211, 1214 (M.D. Fla. 2020). Thus, it is clear that the legislature intended the statute to apply
retroactively, with no carve-out for already commenced cases, and I turn to the second inquiry
under Florida law: “whether retroactive application is constitutionally permissible.”
Chase Fed.
Hous. Corp.
,
2. Whether Retroactive Application is Constitutionally Permissible
“[E]ven where the Legislature has expressly stated that a statute will have retroactive
application, this Court will reject such an application if the statute impairs a vested right, creates
a new obligation, or imposes a new penalty.”
Menendez v. Progressive Exp. Ins. Co.
, 35 So. 3d
873, 877 (Fla. 2010);
see Chase Fed. Hous. Corp.
,
[6] Likewise, courts must reject the retroactive application where such application would
“impair[] the obligation of contracts.”
Menendez
,
whether retroactive application of the statute ‘attaches new legal consequences to events
completed before its enactment.’”
Menendez
,
“Article I, section 2 of the Florida Constitution guarantees to all persons the right to
acquire, possess, and protect property. Section 9 of the same article provides that ‘[n]o person
shall be deprived of life, liberty or property without due process of law.’ Art. I, § 9, Fla. Const.”
Am. Optical Corp. v. Spiewak
,
Defendant argues that the Florida Statute does not impair vested rights because subsection (3)(a), which provides immunity, is remedial in nature, in that it operates as a “legislative interpretation” that was intended to clarify existing Florida law with regard to the obligations of educational institutions during COVID-related closures. (ECF No. 42 at 8-9.) Defendant further contends that subsection (3)(a) “provid[es] a remedy for educational institutions to employ against lawsuits for recovery of tuition and fees based on those institutions’ ‘reasonably necessary’ actions in response to the COVID-19 pandemic.” ( Id. at 9.) [7] I disagree.
Plaintiffs’ causes of action accrued more than one year before the passage of the statute
when the alleged breach of contract, unjust enrichment, and conversion took place. And this
lawsuit was filed on May 14, 2020 – also more than a year before the legislation was enacted.
The immunity provision in subsection (3)(a), if given retroactive effect, would impair and indeed
destroy Plaintiffs’ ability to recover on their already-asserted claims. Retroactive application of
the statute thus “would abolish actions that have accrued under the common law,” which “would
offend due process.”
[8]
Maronda Homes
,
Defendant further argues that even if the immunity provisions in subsection (3)(a) impair
a substantive vested right, the evidentiary provision in subsection (4) is procedural – and thus can
be constitutionally applied prospectively – because it “relates to the admissibility of evidence.”
( at 10.) While phrased as merely an evidentiary change, subsection (4) is in effect a
substantive change to Florida law with regard to the documents that govern the relationship
between a student and a university.
See, e.g.
,
Gibson v. Lynn Univ., Inc.
,
Because the Florida Statute would violate due process by impairing Plaintiffs’ vested
rights in their causes of action, its retroactive application is impermissible and the Statute cannot
[9]
Moreover, if – as Defendant argues – subsection (4) is merely procedural because it
only implicates the “admissibility of evidence,” (
see
ECF No. 42 at 10), under the
Erie
doctrine a
federal court would not be bound by it,
see Erie R.R. Co. v. Tompkins
,
constitutionally be applied in this case to bar Plaintiffs’ claims.
[10]
See Williams
,
Standing
Defendant moves to dismiss the Parent Plaintiffs’ claims under Rule 12(b)(1) for lack of
standing. There are three constitutional standing requirements that every plaintiff must satisfy in
order to invoke the jurisdiction of the federal courts: (1) “an injury in fact (
i.e.
, a concrete and
particularized invasion of a legally protected interest)”; (2) “causation (
i.e.
, a fairly traceable
connection between the alleged injury in fact and the alleged conduct of the defendant)”; and
(3) “redressability (
i.e.
, it is likely and not merely speculative that the plaintiff’s injury will be
remedied by the relief plaintiff seeks in bringing suit).”
Sprint Commc’ns Co. v. APCC Servs.,
Inc.
,
The Parent Plaintiffs allege that on behalf of their children, they paid Defendant approximately $11,205 and $12,500, respectively, for tuition, fees, meals, and housing for the spring 2020 semester. (AC ¶¶ 19, 22.) Defendant argues that Parent Plaintiffs were not party to any contractual agreement with UT, nor were they entitled to any of the benefits (such as education or services) that were the subject of the relationship between the majority-age Student Plaintiffs and UT. (D’s Br. at 6.)
Plaintiffs’ theory is that the Parent Plaintiffs have suffered an economic loss because they would not have paid the same amount of tuition and fees on behalf of their children for online education. (ECF No. 26 (“Ps’ Opp.”) at 4-5.) In support Plaintiffs cite three state-law cases, none of which addressed standing, let alone Article III standing in federal court. ( Id. at 6.) [11] Plaintiffs point out that there is a “custom” that parents who have economic means pay for their children’s higher education; that parents’ income may be relevant to whether a student qualifies for financial aid; and that family law courts may require, as part of a separation or custody order, that a parent be required to pay tuition. ( at 6-7.) But they fail to explain why any of those facts demonstrate standing here.
The Court agrees with Defendant that the Parent Plaintiffs lack standing. Other federal
courts throughout the country have so held in COVID-19 tuition litigation.
See, e.g.
,
Rynasko v.
N.Y. Univ.
, No. 20-CV-3250,
Here, as in other COVID-19 tuition cases where courts have found that parents do not
have standing, Plaintiffs allege no direct contractual relationship between UT and the Parent
Plaintiffs. The alleged contractual relationship was strictly between the students and UT, and the
benefits of the promises that Plaintiffs allege were breached are exclusively benefits that would
flow to the students, not their parents. (AC ¶¶ 21, 24, 43, 58-59, 61.) The Parent Plaintiffs’
involvement, as alleged in the Amended Complaint, begins and ends with the payment of tuition.
( ¶¶ 19, 22.) But the payment of tuition alone “does not create a contractual relationship
between parents and a college.”
Rynasko
,
Absent a direct contractual relationship, the fact that the Parent Plaintiffs paid tuition is
insufficient unless Plaintiffs also plausibly allege that Parent Plaintiffs were intended third party
beneficiaries of the contracts between Defendant and Student Plaintiffs.
See Rynasko
, 2021 WL
1565614, at *3. But this is plainly not the case; the sole beneficiaries of these contractual
relationships –
i.e.
, the recipients of the education and services for which the parties contracted –
are the students.
See In re Univ. of Miami
,
Breach of Contract
“For a breach of contract claim, Florida law requires the plaintiff to plead and establish:
(1) the existence of a contract; (2) a material breach of that contract; and (3) damages resulting
from the breach.”
Vega v. T-Mobile USA, Inc.
,
Here, Plaintiffs allege that they agreed to pay tuition and fees to Defendant in exchange for Defendant’s promise to provide in-person educational and other related services, and that the terms of this agreement were set forth in, among other places, publications that include Defendant’s Spring Semester 2020 Course Catalog, Course Schedule Search tool, course-specific syllabi, and class schedules. (AC ¶ 57.) Plaintiffs allege that Defendant materially breached the contractual agreement by failing to provide in-person educational services and that such failure resulted in damages to Plaintiffs. ( Id. ¶¶ 62, 65-66.) Plaintiffs also allege that they paid certain fees to Defendant and that Defendant failed to provide promised services in exchange. ( ¶¶ 63-64.)
1. Existence of a Valid Contract
Formation of a valid contract under Florida law requires “offer, acceptance,
consideration, and sufficient specification of essential terms.”
Jericho All-Weather Opportunity
Fund, LP v. Pier Seventeen Marina & Yacht Club, LLC
,
with respect to in-person educational services. Defendant argues that Plaintiffs improperly rely on promotional materials and university policies that do not contain any contractual promises. Rather, according to Defendant, the Court should look to the terms of UT’s Financial Responsibility Statement (“FRS”), (ECF No. 21 (“Gregory Decl.”) Ex. A), signed by each Student Plaintiff, ( id. ¶ 6), which does not guarantee any specific mode or location of class instruction and which Defendant argues constitutes the entirety of the relevant contractual agreement between the parties. Finally, Defendant contends that Plaintiffs have failed to identify any contractual terms that would entitle them to a pro-rated refund of fees paid at the beginning of the semester.
a. Promises to Plaintiff
“Under Florida law, the legal relationship between a private university and a student is
solely contractual in character.”
Gibson
,
Plaintiffs base their allegations here on exactly the sort of materials that have been found sufficient in other cases: UT’s Course Catalog, Course Schedule Search and Registration tool, syllabi, and course schedules. (AC ¶ 2.) The Amended Complaint includes screenshots of the Course Catalog depicting the option given to students to select courses given in a classroom setting as opposed to online, ( id. ¶ 4), screenshots of the Course Schedule Search and Registration tool specifically indicating that the delivery mode of courses would be in-person, ( id. ¶¶ 5), [13] and a screenshot of a course schedule indicating the physical classrooms in which the courses were going to be delivered, ( id. ¶ 7). Plaintiffs also allege that their course syllabi also reference the on-campus locations of their classes, ( id. ¶ 8), and point to Defendant’s promotional materials, which highlight the equipment and facilities available to students on campus, ( id. ¶ 41).
Defendant attacks some of these publications as purely informational (the Course
Catalog), or as being individually insufficient to create a binding contract (a course syllabus).
(D’s Br. at 10-13.) Defendant argues that other publications, such as the Course Schedule Search
and Registration tool, are “red herrings” because they do not include specific statements
promising in-person education in exchange for tuition. ( at 10-11.) But taken together, these
materials are sufficient to allege an implied contract with the specific term that the classes in
which the students enrolled would be held in person.
See, e.g.
,
Salerno
,
b. FRS Defendant argues that this case is distinguishable from other COVID-19 tuition cases due to the FRS. [14] It has five sections, captioned “Payment of Fees/Promise to Pay,” “Billing Errors,” “Delinquent Account/Collection,” “Communication,” and “Entire Agreement.” (Gregory Decl. Ex. A.) The first paragraph of the first section provides:
I understand that when I register for any class at The University of Tampa or receive any service from The University of Tampa, I accept full responsibility to pay all tuition, fees and other associated costs assessed as a result of my registration and/or receipt of services. I further understand and agree that my registration and acceptance of these terms constitutes a promissory note agreement (i.e., a financial obligation in the form of an educational loan as defined by the U.S. Bankruptcy Code at 11 U.S.C. §523(a)(8)) in which The University of Tampa is providing me educational services, deferring some or all of my payment obligation for those services, and I promise to pay for all assessed tuition, fees and other associated costs by the published or assigned due date.
( Id. Ex. A at 2.) The last section provides:
This agreement supersedes all prior understandings, representations, negotiations and correspondence between the student and The University of Tampa, constitutes the entire agreement between the parties with respect to the matters described, and shall not be modified or affected by any course of dealing or course of performance. This agreement may be modified by The University of Tampa, if the modification is signed by me. Any modification is specifically limited to those policies and/or terms addressed in the modification.
( Id. Ex. A at 3.) Defendant argues that because the FRS constitutes the entire agreement between it and Plaintiffs, and includes no promise of in-person educational services, no contract for such services can exist.
Plaintiffs contend that the FRS cannot constitute the full scope of their agreement with
Defendant because it lacks numerous essential terms. The
In re Univ. of Miami
court, applying
Florida law, found an analogous argument persuasive.
See
Defendant attempts to distinguish
In re Univ. of Miami
on the basis of the merger clause
in UT’s FRS. Under Florida law, “[a]lthough the existence of a merger clause does not
per se
establish that the integration of the agreement is total, a merger clause is a highly persuasive
statement that the parties intended the agreement to be totally integrated.”
Jenkins v. Eckerd
Corp.
,
The merger clause in the FRS does not purport to integrate the entirety of the contractual
agreement between students and UT; rather, it is limited to the “matters described,” which are
registration for classes constituting the student’s commitment to pay tuition, refunds if the
student withdraws from classes, billing errors, collection of delinquent accounts, and billing-
related communications. (Gregory Decl. Ex. A.) Nor could the FRS properly integrate the
entirety of the agreement, because it is missing essential terms including the nature of the
educational services UT is to provide and the amount of tuition and fees owed.
Cf. Jones Boat
Yard, Inc. v. M/V CAPELLA C
, No. 06-CV-21203,
Contrary to Defendant’s argument,
In re Univ. of Miami
is instructive even in the face of
the merger clause here. There, the court held that the absence of essential terms rendered the
FRS “not a contract” and merely “relevant to the formation of the alleged contract.”
In re Univ.
of Miami
,
Defendant has identified several recent cases where courts upheld FRS-equivalent
agreements as unambiguous.
See Chong v. Ne. Univ.
,
Because the FRS lacks numerous essential terms, the Court finds, at this early stage and
on this limited record, that it is plausibly not the entirety of the parties’ agreement such that it
prohibits consideration of promises contained in university catalogs, handbooks, and university
policies and procedures.
See In re Univ. of Miami
,
2. Material Breach Defendant argues that Plaintiffs’ breach of contract claims should be dismissed because Plaintiffs have failed to allege a material breach. Defendant argues that by providing instruction and academic credit to Plaintiffs and advancing them toward their degrees, Defendant performed the essence of the contract. (D’s Br. at 15-16.)
This argument has been explicitly rejected by courts applying Florida law. The court in
Rosado
likened the switch from in-person to online instruction to “purchasing a Cadillac at full
price and receiving an Oldsmobile. Although both are fine vehicles, surely it is no consolation to
the Cadillac buyer that the ‘Olds’ can also go from Point A to Point B.”
Following Defendant’s logic, a theatergoer who paid to see Hamilton on Broadway would suffer no damages if the theater shut down, kept his money, and allowed him to watch a recording of Hamilton on Disney+. The two experiences are simply not the same and, therefore, have different values. Neither the theatergoer nor Plaintiff should be required to accept less than what they bargained for.
Further, while Defendant is correct that a breach must “go to the essence of the contract”
in order to be material,
MDS (Can.), Inc. v. RAD Source Techs., Inc.
,
3. Actionable Damages
Defendant further argues that Plaintiffs’ breach of contract claims must fail because
(1) Plaintiffs suffered no actual harm as a result of Defendant’s switch to online instruction, and
(2) the damages alleged are not ascertainable. Defendant’s first argument fails for the same
reasons as its argument regarding material breach. Plaintiffs have plausibly alleged a contract
for in-person educational services which were not provided, and the Court is not persuaded by
Defendant’s assertions that degree advancement was the only benefit of the bargain.
See, e.g.
,
Rosado
,
Defendant’s second argument characterizes the alleged damages as speculative and
subjective. (D’s Br. at 17-18.) But Plaintiffs point to objective metrics on which they base
statements about the value of in-person as opposed to online education – specifically, alleging
that they paid a premium to attend in-person classes at UT as opposed to paying a lower price to
attend online courses elsewhere. (AC ¶ 43.) Plaintiffs enumerate several in-person experiences
for which they allegedly bargained and which Defendant touted, (
see id.
¶¶ 39-41, 43), and seek
a pro-rated return of tuition for the difference in value between a semester that included these
experiences and one that did not.
[16]
This is sufficient because, at the pleading stage, “such
allegations are enough to draw reasonable inferences that the alleged breach was not trivial and
that damages flowed from the breach.”
Gibson
,
4. Ratification Finally, Defendant argues that Plaintiffs’ breach of contract claims must be dismissed because Plaintiffs ratified any alleged breach by continuing with their classes following the switch to online instruction. Defendant asserts that “Plaintiffs could have withdrawn or declared breach of such material term in March 2020 (when the transition took place) and demanded that any prior paid tuition and fees be refunded due to the University’s alleged breach.” (D’s Br. at 18.)
As a general matter, “[r]atification occurs where a party with full knowledge of all the
material facts makes an affirmative showing of his or her express or implied intention to adopt an
act or contract entered into without authority.”
Zurstrassen v. Stonier
,
For the above-stated reasons, Defendant’s motion to dismiss is DENIED with respect to Plaintiffs’ tuition-based breach of contract claims. [18]
5. Fees
Defendant also argues, with respect to Plaintiffs’ claims for a return of pro-rated fees, that
Plaintiffs have failed to allege terms in Defendant’s Tuition and Fee Schedule promising to
provide specific services that were not delivered once programming shifted online. On this
issue, at this stage, the Court agrees with Defendant. Student Plaintiffs allege that they each paid
a “mandatory Student Service Fee,” which “provides support for a number of student services,
programs and activities,” as well as a “mandatory Student Government Fee,” which “provides
basic support to student government, student productions, publications and other student-
sponsored organizations.” (AC ¶¶ 20, 23, 63 (cleaned up).) Plaintiffs allege that these fees were
“ specifically intended to cover access to programs, facilities, activities, computing labs, and access to
on-campus events, all of which Plaintiffs and Class Members could no longer partake in.” ( ¶¶ 20,
23.) But they have not provided facts supporting that conclusion or otherwise explained where that
intent was manifested. The plain language of each fee description states that the fees go toward
the “support” of programs, not “access,” and Plaintiffs have not alleged that the programs were
not supported. While tuition monies are paid in exchange for a university
providing
instruction,
here Plaintiffs have alleged that the fees were paid in exchange for Defendant
supporting
programs.
See Chong
,
If it were plausible that these fees provided physical access to specific programs or activities that were unavailable after the change to online classes, see id. at *4 (dismissing as to fees that “support” activities or facilities but permitting claim to go forward where fee allowed students to access particular facilities or resources, such as fitness facilities and sporting events), or that the fees collected to support various activities were not in fact used for that purpose, the outcome might be different. While it is plausible that after March 11, 2020, students could not, for example, visit the library or computer lab or obtain in-person treatment at student health services, the generic description of the fees that Plaintiffs provide does not suggest that the contested fees in fact went toward maintaining access to those facilities, nor do Plaintiffs allege that those facilities did not provide services to students while they were learning remotely. And
while it is plausible that students could not, for example, participate in live theater or club sports,
there is no allegation that during the relevant period the fees did not go toward supporting other
student activities that could continue during the pandemic, such as student government, online
publications, tutoring, political groups, or filmmaking.
See Crawford v. Presidents & Dirs. of
Georgetown Coll.
, No. 20-CV-1539,
For now, Plaintiffs have failed to allege with adequate specificity that fees intended to support certain programs were tied to access to on-campus facilities or in-person activities and were not used for such purposes. Plaintiffs have only shown that fees were supposed to support student services and student activities, and Plaintiffs have not alleged that such programs were not supported. Defendant’s motion is therefore GRANTED with respect to Plaintiffs’ fee-based breach of contract claims, but with leave to amend.
Unjust Enrichment Defendant’s first argument with respect to Plaintiffs’ unjust enrichment claim is that the claim may not be pleaded in the alternative, in this case because the allegations incorporated into Plaintiffs’ claim allege that there is a contract governing the matter and thus a legal remedy. (D’s Br. at 20-22.) Defendant points out that Plaintiffs agree that the nature of their relationship with Defendant is contractual, that the nature of the relationship between a student and a university is contractual under Florida law, and that Plaintiffs have not pleaded the lack of an adequate remedy at law. ( Id .)
Defendant is correct that an unjust enrichment claim cannot survive when an express
contract with a legal remedy exists.
Alhassid v. Bank of Am., N.A.
,
Defendant’s second argument is that Plaintiffs have failed to plausibly allege the
necessary elements of an unjust enrichment claim. Those elements under Florida law are that
“‘(1) plaintiff has conferred a benefit on the defendant, who has knowledge thereof; (2)
defendant voluntarily accepts and retains the benefit conferred; and (3) the circumstances are
such that it would be inequitable for the defendant to retain the benefit without first paying the
value thereof to the plaintiff.’”
Rosado
,
The essence of Defendant’s argument is that Student Plaintiffs received a “different” but
equally valuable educational experience in the second half of the spring 2020 semester, and
therefore Defendant cannot have been unjustly enriched. ( at 23-24.) Whether this is the case
requires a more developed record, but at this stage Plaintiffs have satisfied their burden by
pleading facts – including that because online students cannot access campus facilities and
faculty, online education is worth less than in-person education, (
see
AC ¶ 43) – that plausibly
suggest that it could be inequitable for Defendant to retain the full tuition paid for the spring
2020 semester,
see Rhodes
,
Finally, Defendant argues that Plaintiffs have failed to sufficiently allege unjust enrichment with respect to the fees paid by Plaintiffs for the spring 2020 semester. The Court agrees. As explained above, Plaintiffs have only alleged that the fees were meant to support programs that Defendant offered. Absent nonconclusory allegations that the fees did not go toward their intended purpose, Plaintiffs have not adequately pleaded circumstances in which it would be inequitable for Defendant to retain such fees.
For the foregoing reasons, Defendant’s motion to dismiss is GRANTED with respect to fee-based unjust enrichment claims, but with leave to amend.
Conversion
“Under Florida law, conversion is an intentional tort consisting of an unauthorized act
which deprives another of his property, permanently or for an indefinite time.”
Furmanite Am.,
Inc. v. T.D. Williamson, Inc.
,
Plaintiffs’ Amended Complaint suggests that the property in question is Plaintiffs’ “ownership right to the in-person educational services they were supposed to be provided in exchange for their Spring Semester 2020 tuition and fee payments to Defendant.” (AC ¶ 77.) This attempt to plead around the requirement that the subject of the conversion be property is undermined by the fact that Plaintiffs go on to allege that “Defendant’s retention of the fees paid by Plaintiffs . . . deprived Plaintiffs . . . of the benefits for which the tuition and fees paid,” and ask for the return of a pro-rated portion of the semester’s tuition. ( ¶¶ 80-81.) It is plain that the property of which Plaintiffs claim to have been deprived is the money they paid for an in- person education, not the in-person education itself. Indeed, it is hard to see how Defendant exercised dominion over the education. Accordingly, this claim fails.
Plaintiffs argue that they fall under an “exception” to the general rule that a monetary
obligation cannot form the basis for a conversion action,
Bel-Bel Int’l Corp.
,
Defendant’s motion to dismiss the conversion claims is GRANTED.
Leave to Amend
Leave to amend a complaint should be freely given “when justice so requires.” Fed. R.
Civ. P. 15(a)(2). “Leave to amend, though liberally granted, may properly be denied” for
“‘repeated failure to cure deficiencies by amendments previously allowed’” or “‘futility of
amendment,’” among other reasons.
Ruotolo v. City of N.Y.
,
Amendment of the conversion claim would be futile, but amendment of the breach of
contract and unjust enrichment claims as they relate to student fees may not be. Plaintiffs have
already had a chance to amend, after Defendant’s pre-motion letter gave notice of the grounds
for the intended motion, and in general a plaintiff’s failure to fix deficiencies in the previous
pleading, after being provided notice of them, is alone sufficient ground to deny leave to amend.
See Nat’l Credit Union Admin. Bd. v. U.S. Bank Nat’l Ass’n
,
2018) (“When a plaintiff was aware of the deficiencies in his complaint when he first amended, he clearly has no right to a second amendment even if the proposed second amended complaint in fact cures the defects of the first. Simply put, a busy district court need not allow itself to be imposed upon by the presentation of theories seriatim .”) (cleaned up). But the grounds set forth in the pre-motion letter, and the discussion at the pre-motion conference, did not differentiate between Plaintiffs’ payment of tuition and of fees, and that distinction turns out to be consequential. Accordingly, in my discretion I will permit Plaintiffs to amend their allegations as to the student fees only, if they can do so in good faith. Should Plaintiffs wish to do so, the Second Amended Complaint (“SAC”) shall be filed no later than November 3, 2021, and Defendant shall respond in the ordinary course. If Plaintiffs do not file a SAC by that date, Defendant shall answer the AC no later than November 17, 2021.
IV. CONCLUSION
For the foregoing reasons, Defendant’s motion to dismiss is GRANTED with respect to the standing of Parent Plaintiffs, Plaintiffs’ fee-based breach of contract claim, Plaintiffs’ fee- based unjust enrichment claim, and Plaintiffs’ conversion claim, and DENIED with respect to Plaintiffs’ tuition-based breach of contract claim and Plaintiffs’ tuition-based unjust enrichment claim. The Clerk of Court is respectfully directed to terminate the pending motion, (ECF No. 19).
SO ORDERED.
Dated: October 20, 2021
White Plains, New York
_____________________________ CATHY SEIBEL, U.S.D.J.
Notes
[1] Plaintiffs D’Amario, Sean Dunn, and Joshua Dunn were not named plaintiffs in the initial complaint, but were added in the Amended Complaint. ( See AC.)
[2] Rule 5.1(c) provides that “the attorney general may intervene within 60 days after the notice is filed or after the court certifies the challenge, whichever is earlier.” Fed. R. Civ. P. 5.1(c).
[3] While not relevant here, “losses or damages that resulted solely from a breach of an express contractual provision allocating liability” or that were caused by a college or university’s bad faith are exempted from the Florida Statute. § 768.39(5).
[4] Plaintiffs here, like those in most COVID lawsuits, address their clams only to the spring 2020 semester, when classes went online after they had begun. Plaintiffs do not raise any claim regarding the fall 2020 or succeeding semesters, presumably because for those semesters they were aware that classes would or might be remote when they decided whether or not to register. Because the lawsuits the Florida legislature wanted to block relate almost exclusively to events occurring more than a year earlier, the legislation must have been intended to apply retroactively. Further, the Statute refers to events occurring during the declared state of emergency, but by the time of its enactment no emergency orders were in place. See Fla. Exec. Order No. 21-102 (eliminating existing state emergency COVID-19 orders as of May 3, 2021); Fla. Exec. Order No. 21-101 (invalidating COVID-19 emergency orders enacted by local governments prior to July 1, 2021).
[5] That the legislature considered giving the statute this effect but decided against it is not,
standing alone, clear evidence of legislative intent as to retroactive application.
See Bay Farms
Corp. v. Great Am. All. Ins. Co.
,
[7] Defendant makes a similar argument with regard to subsections (3)(b) and (3)(c). The
Court need not address the applicability of subsections (3)(b) and (3)(c) at this stage because
they deal with the viability of certain defenses that, even if applicable to excuse nonperformance,
would not necessarily preclude the possibility that Plaintiffs could recover damages in equity.
See Rosado v. Barry Univ. Inc.
,
[8] This principle applies to unfiled actions that have accrued as well as to pending
lawsuits.
See Williams
,
[10] Because the Florida Statute cannot be applied based on my conclusion that its retroactive application would improperly impair Plaintiffs’ vested rights, I do not consider whether retroactive application of the statute unconstitutionally impairs an obligation of contract or address Plaintiffs’ direct constitutional challenges to the statute under the U.S. and Florida Constitutions.
[11] In
Uddin v. New York Univ.
,
[12] The Court is also unpersuaded by Plaintiffs’ efforts to distinguish standing with regard
to the parents’ breach of contract claims from standing to bring the unjust enrichment and
conversion claims. As other courts considering similar claims have concluded, the above
reasons to find that parents do not have standing apply with equal force to all three of the claims
brought here.
See, e.g.
,
Romankow
,
[13] Plaintiffs allege that UT’s the Course Schedule Search and Registration tool indicated that the delivery mode of every spring 2020 class for which the Student Plaintiffs registered would be in-person. (AC ¶ 6.)
[14] Because the FRS is not mentioned in the Amended Complaint and Plaintiffs did not
rely on it in framing their claims, it is not properly considered on a motion to dismiss.
See, e.g.
,
Goel v. Bunge, Ltd
.,
[15] The
Chong
court later granted summary judgment to the university based on a
disclaimer in its handbooks explicitly reserving the right to change or cancel its academic
offerings and disclaiming liability for failure to deliver educational services based on causes
beyond its control.
See Chong v. Ne. Univ
., No. CV 20-10844,
[16] Defendant at times implies that Plaintiffs are seeking a full refund of their tuition and fees for March 6, 2020 onward, ( see D’s Br. at 1, 4; ECF No. 28 at 1, 10-11), and while some language in the Amended Complaint could be read that way, ( see, e.g. , AC ¶ 18 (seeking “disgorgement of the pro-rated portion of tuition and fees, proportionate to the amount of time that remained in the Spring Semester 2020 when classes moved online and campus services ceased being provided”)), it appears to the Court that Plaintiffs are seeking the difference in value between the in-person experience for which they alleged they bargained and the online experience they got, ( see, e.g. , id. ¶ 66 (seeking “ pro-rated portion of any Spring Semester 2020 tuition and fees for education services not provided since UT has not held in-person classes since March 6, 2020”)). Plaintiffs do not allege that they did not receive online instruction and advancement toward their degrees, so the Court cannot imagine a scenario in which they would be entitled to a 100% refund.
[17] While Defendant argues that cases like Rosado and Gibson are distinguishable because the universities in those cases offered online classes “at a predetermined, lower fee” than their in- person course offerings, (ECF No. 28 at 4 & n.2), this distinction does not make the damages here unascertainable or warrant dismissal of Plaintiffs’ claims at this stage. It is plausible that – perhaps through comparisons to peer institutions and/or expert testimony – Plaintiffs will be able to provide a basis to assess the value of UT’s online classes relative to its in-person ones.
[18] The Court stresses, as other courts have in this context, that it expresses no opinion on
the merits of Plaintiffs’ breach of contract claims and merely holds that the claim is sufficiently
pleaded to survive the motion to dismiss.
See, e.g.
,
Salerno
,