Cahn v. Antioch University, 82-1137.

• Decision Date: 29 August 1984
• Docket Number: No. 83-187.,No. 82-1137.,No. 82-1138.,82-1137.,83-187.,82-1138.
• Citation: 482 A.2d 120
• Parties: Edgar S. CAHN and Jean Camper Cahn, Appellants, v. ANTIOCH UNIVERSITY, et al., Appellees. ANTIOCH UNIVERSITY, Appellant, v. Edgar S. CAHN and Jean Camper Cahn, Appellees.
• Court: D.C. Court of Appeals

Page 120

482 A.2d 120

Edgar S. CAHN and Jean Camper Cahn, Appellants, v. ANTIOCH UNIVERSITY, et al., Appellees.

ANTIOCH UNIVERSITY, Appellant, v. Edgar S. CAHN and Jean Camper Cahn, Appellees.

No. 82-1137.

No. 83-187.

No. 82-1138.

District of Columbia Court of Appeals.

Argued May 9, 1984.

Decided August 29, 1984.

David M. Silberman and Herman Schwartz, Washington, D.C., for Edgar S. Cahn and Jean Camper Cahn, appellants in Nos. 82-1137 and 83-187 and appellees in No. 82-1138.

Terrence O'Donnell and J. Alan Galbraith, Washington, D.C., for Antioch University, et al., appellees in Nos. 82-1137 and 83-187 and appellants in No. 82-1138.

Before PRYOR and TERRY, Associate Judges, and REILLY, Chief Judge, Retired.

TERRY, Associate Judge:

This case presents what we hope is the last chapter of an acrimonious dispute between Antioch University and the former deans of its law school. The former deans contend that the trial court erred in not awarding them damages for lost salary as faculty members under their employment contract. Antioch University argues in its cross-appeal that appellants breached the fiduciary duty which they owed to the University. As damages, the University seeks to recover the expenses it incurred in In re Antioch University, 418 A.2d 105 (D.C. 1980), under the bad-faith exception to the American rule on attorney's fees. The University also contends that it is entitled to recover $8,000 which appellants paid to two attorneys out of University funds without authorization.

We hold that the trial court erred in concluding that the Cahns owed a fiduciary duty to the students and clients of the law school. As employees of Antioch University, the Cahns' only fiduciary duty was owed to the University. We therefore hold that the University is entitled to recover the $8,000 which it seeks as damages for the Cahns' breach of that duty, and to that extent we reverse the judgment of the trial court and remand the case for modification of the judgment in favor of the University. In all other respects, however, we affirm the judgment below, thereby rejecting not only the Cahns' salary claims but also the University's claim for attorney's fees and litigation expenses.

I. PROCEDURAL HISTORY

In November 1979 Edgar S. Cahn and Jean Camper Cahn, co-deans of the Antioch School of Law, filed a complaint against Antioch University seeking "(1) a declaration that the law school [was] an entity independent of and separate from the University, or, alternatively, (2) a judgment that the law school [could] conduct its fiscal and administrative affairs without `interference' from the University, with injunctive relief and continuing supervision of the court to enforce [the] judgment." In re Antioch University, supra, 418 A.2d at 107 n. 2. After a lengthy hearing on the parties' cross-motions for preliminary injunctions, the trial court entered an order in favor of the University directing, in part, that

the Co-Deans and responsible administrative personnel of the Antioch School of Law transfer to the Central Business Office of Antioch University in Yellow Springs, Ohio, all funds received in connection with the operation of the Antioch School of Law. . . .

That same day the Cahns received a letter from William Birenbaum, president of the University, terminating their employment by Antioch University "in any role whatsoever. . . ." The trial court's order granting the University's motion for a preliminary injunction was affirmed by this court. In re Antioch University, supra.¹

In October 1980 the Cahns amended their complaint to include a claim for breach of contract. Specifically, the Cahns alleged that their "termination . . . was unlawful and in violation of their contracts as members of the faculty, University practices and prevailing academic standards and practices." The University in turn filed an amended counterclaim against the Cahns in which it sought to recover (1) $250,000 in damages on a breach of fiduciary duties claim, (2) $8,000 for unauthorized legal services paid by the Cahns out of University funds, (3) $2,331 for gardening and landscaping services performed on the Cahns' personal residence, (4) $5,000 for salary advanced to Edgar Cahn in 1979, (5) $2,206 for money refunded to the Cahns by two airlines for several unused plane tickets which had been purchased with University funds, and (6) $2,070.40 for "double payment of wages from the spring of 1979."² Following a three-day trial without a jury, the court took the matter under advisement.

In its findings of fact and conclusions of law, issued three months later, the court ruled that the Cahns had not breached any of their fiduciary duties toward the University. With respect to the Cahns' breach of contract claim, the court determined that the Cahns "held separate and distinct positions as members of the faculty" and that the "action taken by [them] which provided sufficient cause to discharge them as administrators [did] not provide de facto a sufficient basis for discharging them as members of the faculty prior to the expiration of the employment period." Nevertheless, the court concluded that since the Cahns had not taught during the 1979-1980 academic year, they had not suffered any damages from lost salary due to their improper termination as members of the faculty. The court did, however, award them damages for the loss of fringe benefits from January 12 through June 30, 1980. The court also held that the Cahns "were not entitled to notification of non-reappointment as faculty by December 15 because they failed to prove by a preponderance of the evidence that they were members of the faculty bargaining unit and therefore had rights under the collective bargaining agreement or that the University had agreed on a policy binding on [it] and applicable to the school of law to give notification of non-reappointment by December 15 to law school faculty not members of the bargaining unit." The University and the Cahns bring these cross-appeals.³

II. THE EVIDENCE AT TRIAL

A. The Breach of Contract Claims

On December 16, 1971, Dr. James Dixon, who was then the president of Antioch College, appointed the Cahns "Professor[s] of law and Co-Dean[s] of the Antioch School of Law." On July 3, 1973, President Dixon reappointed them co-deans for a one-year term. A form accompanying their letters of appointment designated their positions as "administrative." In July of 1974 the Cahns were both offered three-year appointments, but they declined the offer, saying that they would not accept any appointment in excess of one year. They continued as co-deans for the next three years under annual reappointments. Pursuant to a reorganization of the College in 1977,⁴ the Cahns were appointed "co-provosts of the Antioch School of Law" for the 1977-1978 academic year, and reappointed co-provosts for the subsequent year.⁵ They were not given any written notification of reappointment for 1979-1980, their last year at the law school.

Edgar Cahn testified that from the outset he and his wife served as members of the faculty. He stated that they never received any repudiation of their 1971 appointments as professors of law and that the only risk which they associated with the litigation against the University was that they would lose their positions as deans. If this were to occur, Mr. Cahn testified, they would "simply walk in the next day as faculty member[s] and try to work together as a community."⁶ When asked whether this reversion to faculty status was guaranteed in any document, Cahn replied, "It was based on an explicit agreement that did not have to be reduced and to my knowledge was not reduced to writing." Edgar Cahn further testified that even though the University's last letters of appointment provided that he and his wife could be terminated for financial reasons, the University would still have had "to deal with [their] rights as faculty members which would be for a remuneration scale appropriately agreed to by the collective bargaining agreement. . . ."⁷

Patricia Eames, a member of the law school faculty during the 1978-1979 and 1979-1980 academic years, testified about the law school's policy on notice of non-reappointment. She stated that during her tenure notice of non-renewal would be given to a faculty member by March 15 of his first year or December 15 of his second year of teaching. This policy applied to both members and non-members of the collective bargaining unit, provided that they were on the faculty. Eames stated that the faculty "asked the deans to initiate legal proceedings to prevent the university from letting the law school go down the drain." The faculty assumed that if the legal battle was lost, the Cahns would lose their positions as deans, but it never anticipated that by bringing that action the Cahns would also jeopardize their positions as faculty members.⁸

Professor James P. Dixon, the former president of Antioch University (then Antioch College) responsible for the appointment of the Cahns as co-deans and professors of law at the law school, testified that he never entered into any agreement with the Cahns regarding residual faculty status. He said that in appointing them professors of law, he was bestowing an academic title upon them which "carried . . . the connotation of rank . . . and scholarly status within the legal profession," but that their teaching "was not a primary consideration" in their appointment as deans.

William M. Birenbaum, who replaced President Dixon in 1976, testified that during his presidency no dean or provost connected with the University had achieved faculty status by virtue of teaching while holding the position of provost or dean. President Birenbaum stated that the personnel policies affecting the law school faculty were expressed in the collective bargaining agreement. That agreement did not cover the Cahns since, as members of management, "they were front-line negotiators . . . so the...