BARRY UNIVERSITY, INC. v. FIREMAN'S FUND INS. CO. OF WISCONSIN

• Decision Date: 14 May 2003
• Docket Number: No. 3D02-995.,3D02-995.
• Parties: BARRY UNIVERSITY, INC., Appellant, v. FIREMAN'S FUND INSURANCE COMPANY OF WISCONSIN, Appellee.
• Court: Florida District Court of Appeals

845 So.2d 276

BARRY UNIVERSITY, INC., Appellant,
v.
FIREMAN'S FUND INSURANCE COMPANY OF WISCONSIN, Appellee

No. 3D02-995.

District Court of Appeal of Florida, Third District.

May 14, 2003.

845 So.2d 277

Bilzin Sumberg Dunn Baena Price & Axelrod and Mitchell Widom and Raquel M. Gonzalez, San Diego, CA, for appellant

Hinshaw & Culbertson and Andrew E. Grigsby, Miami; Caron, Constants & Wilson and Alfred Constants III, for appellee.

Before SCHWARTZ, C.J.,¹ and COPE and GODERICH, JJ.

COPE, J.

Barry University, Inc. appeals an adverse declaratory judgment on insurance coverage. We affirm.

In four separate lawsuits, former students sued Barry University following the withdrawal of accreditation for the physical therapy program in which they were enrolled. While there are minor differences between the complaints, all allege that in 1994, Barry University achieved probationary accreditation for its new physical therapy program but the written report by the accreditation organization raised a number of concerns. The complaints allege that in its recruitment materials, Barry did not disclose that the accreditation status was probationary. In May of 1996, there was another accreditation report that raised serious questions about the quality of the physical therapy program and the accreditation status.

The plaintiffs began their studies in the fall of 1996 with an anticipated graduation date of June 1999. They say that they were not informed of any of the foregoing information. According to the complaints, the University told the students there was no problem with accreditation and the students should not be concerned about it.

The accreditation organization withdrew accreditation effective October 30, 1996. The students were advised of this but were told that the University was seeking reconsideration and that existing students would be considered graduates of an accredited program for purposes of taking the licensing examination. It is alleged that Barry did not act diligently on the reconsideration. The accreditation organization refused reconsideration and the withdrawal of accreditation came final in August of 1997.

As a result, the plaintiffs became ineligible to sit for the licensing examination. This required them to enroll in other physical therapy programs in order to be permitted to take the licensing examination.

The students filed suit against the University. They alleged breach of contract, fraud in the inducement, and violations of the Florida Deceptive and Unfair Trade Practices Act ("FDUTPA").

The University is covered by a commercial general liability policy issued by appellee Fireman's Fund Insurance Company of Wisconsin. The University requested that Fireman's Fund defend the cases and indemnify the University.² It refused to do so.

845 So.2d 278

The University filed this action for a declaratory judgment. The trial court entered judgment in favor of Fireman's Fund, and the University has appealed

We agree with Judge Genden's analysis, which states in part:

2. [T]he former students seek damages for inter alia, mental distress, anxiety disorders, post-traumatic stress disorder and depression, as a result of BARRY's physical therapy program having lost its accreditation. In support of its motion [for summary judgment], BARRY asserts that the material allegations in the former students' claims trigger FIREMAN'S duty to

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