Central America Health Med. v. Norouzian

• Decision Date: 11 September 2007
• Docket Number: No. WD 66100.,WD 66100.
• Parties: CENTRAL AMERICA HEALTH SCIENCES UNIVERSITY, BELIZE MEDICAL COLLEGE, Appellants, v. Mohammad R. NOROUZIAN a/k/a Mohammad Rahim Norouzian, Respondent.
• Court: Missouri Court of Appeals

236 S.W.3d 69

CENTRAL AMERICA HEALTH SCIENCES UNIVERSITY, BELIZE MEDICAL COLLEGE, Appellants, v. Mohammad R. NOROUZIAN a/k/a Mohammad Rahim Norouzian, Respondent.

No. WD 66100.

Missouri Court of Appeals, Western District.

September 11, 2007.

Motion for Rehearing and/or Transfer to Supreme Court Denied October 30, 2007.

William D. Cross, Daniel Bukovac, Brian R. Markley, Co-Counsels, Kansas City, MO, for appellants.

Daniel J. Baylard, Kansas City, MO, for respondent.

Before HOWARD, P.J., BRECKENRIDGE and NEWTON, JJ.

PATRICIA BRECKENRIDGE, Judge.

Central America Health Sciences University, Belize Medical College ("CAHSU"), appeals the trial court's judgment in favor of Mohammad R. Norouzian on his counterclaim for breach of contract, promissory estoppel, unjust enrichment, and violation of 42 U.S.C. section 1981. CAHSU sued Mr. Norouzian for breach of written agreement, "work, labor and services rendered," and declaratory relief, claiming that Mr. Norouzian failed to pay $4500 in tuition to CAHSU. Mr. Norouzian's counterclaims asserted that, as a medical student at CAHSU, he was discriminated against and was required to pay a higher tuition amount than he had contracted with CAHSU. Further, Mr. Norouzian claimed that CAHSU's withholding his diploma has delayed his career in the medical profession. CAHSU raises eight points on appeal.

In its first point, CAHSU asserts that the trial court erred in denying CAHSU's motion to set aside judgment and for a new trial because it showed good cause to vacate the judgment, in that CAHSU's failure to appear at trial was due to a mistaken belief that the trial date was continued. CAHSU claims in its second point that the trial court erred in entering judgment for Mr. Norouzian on his 42 U.S.C. section 1981 counterclaim because Mr. Norouzian alleged only religious discrimination, and 42 U.S.C. section 1981 does not provide a cause of action for religious discrimination.

In its third point, CAHSU asserts that the trial court erred in entering judgment for Mr. Norouzian on his 42 U.S.C. section 1981 counterclaim, because Mr. Norouzian failed to present evidence demonstrating that CAHSU discriminated against him on the basis of his race. CAHSU claims in its fourth point that the trial court erred in entering judgment for Mr. Norouzian on his breach of contract, promissory estoppel, and unjust enrichment counterclaims because there was not substantial evidence that CAHSU agreed to reduce his tuition beyond the first trimester of medical school.

In its fifth point, CAHSU contends that the trial court erred in awarding Mr. Norouzian $400,000 in actual damages on his counterclaim because he failed to present reasonably certain, non-speculative evidence of his actual damages. CAHSU claims in its sixth point that the trial court erred in awarding Mr. Norouzian $2,000,000 in punitive damages on his counterclaim because the law does not allow punitive damages for breach of contract, promissory estoppel, or unjust enrichment, and Mr. Norouzian did not make a case for a 42 U.S.C. section 1981 violation.

In its seventh point, CAHSU asserts that the trial court erred in awarding Mr. Norouzian $2,000,000 in punitive damages on his counterclaim because the damage award was not based on substantial evidence and the punitive damages award was excessive, unreasonable, and unsupported by the evidence. Finally, CAHSU claims in its eighth point that the trial court erred by denying CAHSU's request for a continuance because CAHSU's attorney withdrew shortly before trial and CAHSU was not given sufficient time to employ new counsel. Because this court finds reversible error in the court's judgment for Mr. Norouzian on his 42 U.S.C. section 1981 counterclaim, the actual damages award, and the punitive damages award, the judgment of the trial court is affirmed in part and reversed in part.

Factual and Procedural Background

CAHSU is a medical school with branches in Belize, Mexico, and the United States. Its principal place of business is Belize. In May 1998, the Dean of CAHSU, Dr. Maurice Modavi, met Mr. Norouzian, a United States citizen and a resident of Jackson County. At the time, Mr. Norouzian was a medical student in the Dominican Republic. The Dominican government, however, shut down his medical school. Dr. Modavi offered students of the former school a $2000 tuition discount, from $5500 per trimester to $3500 per trimester, if they wished to transfer to CAHSU. Mr. Norouzian accepted the offer and applied to CAHSU.

On July 27, 1998, CAHSU sent Mr. Norouzian a letter to inform him that he was accepted to CAHSU and that he could begin his studies in September of that year. The letter required that it be signed and returned with a $2000 deposit if Mr. Norouzian wished to accept. Further, the letter stated, "YOUR TUITION FEE PER TRIMESTER WILL BE $5,500.00 USD, MATRICULATION FEE $2,000.00. * * NOTE: TUITION FEES ARE SUBJECT TO INCREASE WITHOUT NOTIFICATION."

Mr. Norouzian signed the acceptance letter on August 21, 1998. He then went to Dr. Modavi to ask him why the tuition listed in the acceptance letter did not match his offer of $3500 per trimester. In that meeting, Dr. Modavi prepared a handwritten document that Mr. Norouzian purports sets forth the true agreement between CAHSU and Mr. Norouzian.¹ The handwritten document is dated September 10, 1998, has the name "Mohammad Norouzian" written at the top, and is initialed by Dr. Modavi.

Mr. Norouzian requested to pay his tuition through an installment plan. Mr. Norouzian and an employee of CAHSU's bursar office signed the plan on August 21, 1998. The plan schedule called for Mr. Norouzian to make three payments for the fall 1998 trimester. The payments were to be $1267, $1266, and $1266, for a total of $3800, including a $100 installment plan fee.

Mr. Norouzian completed all the courses for his doctor of medicine degree on January 17, 2003.² On January 31, 2003, CAHSU gave Mr. Norouzian a certificate of completion but did not give him his diploma because CAHSU believed Mr. Norouzian's tuition was not paid in full. After some time, Mr. Norouzian began contacting Missouri state representatives to help him obtain his diploma from CAHSU. In November 2004, after it became apparent to Mr. Norouzian that CAHSU would not give him his diploma, he began work as a Kansas City International airport shuttle driver.

On March 8, 2004, CAHSU filed a three-count petition against Mr. Norouzian for breach of a written agreement; "work, labor and services rendered"; and declaratory relief. Specifically, CAHSU alleged that Mr. Norouzian owed the school $4500. Mr. Norouzian filed an answer and a four-count counterclaim against CAHSU for breach of contract, promissory estoppel, unjust enrichment, and violation of 42 U.S.C. section 1981. The counterclaim alleged that: (1) Mr. Norouzian overpaid CAHSU $7,562.50 and CAHSU owes that amount to him; (2) CAHSU's wrongful withholding of Mr. Norouzian's degree has put his medical career on hold, causing him substantial loss; and (3) CAHSU's failure to abide by the tuition reduction agreement "was the result of an illegal act of discrimination based on religion and in violation of 42 U.S.C. section 1981." The counterclaim sought both actual and punitive damages. CAHSU submitted its answer on March 18, 2005.

Daniel Champion initially represented CAHSU. On June 28, 2005, Mr. Champion filed his "notice of motion" and motion to withdraw as counsel of CAHSU. On July 27, 2005, the trial court issued an order permitting Mr. Champion to withdraw and setting the case for trial on September 19, 2005.

CAHSU failed to appear at trial. Mr. Norouzian withdrew his jury demand, and the court heard testimony from Mr. Norouzian. On the same day, the trial court entered judgment "in favor of Defendant and against Plaintiff on all of Plaintiff's Claims and in favor of Defendant and against Plaintiff on all Defendant's Counterclaims in the amount of $400,000.00, for actual damages and $2,000,000.00 for punitive damages."

Ten days later, on September 29, 2005, CAHSU's current counsel filed their entry of appearance with the trial court and filed a motion to set aside judgment and for new trial or, in the alternative, for trial de novo. Following the trial court's denial of CAHSU's motion for a new trial, CAHSU filed this appeal.

No Error in Denying Motion to Set Aside Judgment and for New Trial

In its first point, CAHSU claims that the trial court erred by denying its motion to set aside the judgment and grant a new trial or trial de novo. CAHSU's claim is founded on Rule 75.01, which permits the trial court, for good cause, to vacate a judgment within thirty days after entry of judgment. CAHSU asserts that its failure to appear at trial was due to a mistaken belief that the trial had been continued, and, therefore, it demonstrated good cause under Rule 75.01 to vacate the judgment.

Rule 75.01 states, in pertinent part, "The trial court retains control over judgments during the thirty-day period after entry of judgment and may, after giving the parties an opportunity to be heard and for good cause, vacate, reopen, correct, amend, or modify its judgment within that time." The decision whether to set aside a judgment for good cause under Rule 75.01 is within the discretion of the trial court, "and that ruling will not be interfered with in the absence of an abuse of discretion." Brueggemann v. Elbert, 948 S.W.2d 212, 214 (Mo.App. E.D.1997). "`An abuse of discretion occurs when a trial court's ruling is clearly against the logic of the circumstances then before the court and is so unreasonable and arbitrary that it shocks the sense of justice and indicates a lack of careful, deliberate consideration.'" In re Marriage of Hendrix, 183 S.W.3d 582, 587 (Mo. banc 2006) (citation omitted). "`If reasonable persons can differ as to the propriety of the trial court's action, then it cannot be said that the trial court abused its...