Dieckhaus v. Bd. of Governors of the Univ. of N.C.
| Decision Date | 17 January 2023 |
| Docket Number | COA21-797 |
| Citation | 2023 NCCOA 1 |
| Parties | DEENA DIECKHAUS, GINA MCALLISTER, BRADY WAYNE ALLEN, JACORIA STANLEY, NICHOLAS SPOONEY and VIVIAN HOOD, each individually and on behalf of all others similarly situated, Plaintiffs, v. BOARD OF GOVERNORS OF THE UNIVERSITY OF NORTH CAROLINA, Defendant. |
| Court | North Carolina Court of Appeals |
Heard in the Court of Appeals 10 May 2022.
Appeal by plaintiffs from order entered 17 June 2021 by Judge Edwin G. Wilson, Jr. in Superior Court, Orange County. No. 20CVS564
Anastopoulo Law Firm, LLC, by Blake G. Abbott, for plaintiffs-appellants.
Brooks, Pierce, McLendon, Humphrey & Leonard, LLP, by Jim W. Phillips, Jr. and Jennifer K. Van Zant, and Attorney General Joshua H. Stein, by Special Deputy Attorneys General Laura McHenry and Kari R. Johnson, for defendant-appellee.
¶ 1 Plaintiffs Deena Dieckhaus, Gina McAllister, Brady Wayne Allen, Jacoria Stanley, Nicholas Spooney, and Vivian Hood appeal an order granting Defendant Board of Governors of the University of North Carolina's Motion to Dismiss Plaintiffs' Amended Complaint. The Amended Complaint included both contract and unjust enrichment claims. Because sovereign immunity bars the unjust enrichment claims and because statutory immunity bars both the unjust enrichment and contract claims, we affirm the trial court's order dismissing all claims.
¶ 2 Since this case is at the pleading stage, we rely upon the facts as alleged in Plaintiffs' Amended Complaint.[1] Defendant is the Board of Governors for the University of North Carolina System, and that System includes 17 "constituent institutions throughout the State" (collectively "Universities"). "As a precondition for enrollment" for the Spring 2020 Term, Defendant required students planning to attend the Universities to pay tuition. When charging tuition, Defendant charged students different rates depending on which of two types of programs the students chose, an "in-person, hands-on program[]" and a "fully online distance-learning program[.]" In addition to the differential pricing, Defendant marketed the two programs differently through its and the Universities' "website[s], academic catalogues, student handbooks, marketing materials and other circulars, bulletins, and publications" that differentiate between "fully online" programs and "non-online" programs with "references to and promises about the on-campus experience[.]"
¶ 3 Plaintiffs here all paid tuition and enrolled in the in-person program for the Spring 2020 Term, with one exception. Plaintiffs Dieckhaus, McAllister, Allen, Stanley, and Spooney all enrolled as undergraduates in different Universities in the system. Plaintiff Hood paid tuition to enroll her daughter at one of the Universities' campuses for the Spring 2020 Term.
¶ 4 Beyond the tuition students paid to enroll, they paid additional fees. Defendant charged students, including Plaintiffs, "certain mandatory student fees." In Defendant and its Universities' "publications" including "catalogs" and "website[s]," Defendant "specifically describe[d] the nature and purpose of each fee." The student fees paid by students were then "intended by both the students and Defendant to cover the services, access, benefits and programs for which the fees were described and billed." Plaintiffs paid all applicable fees for the Spring 2020 Term. Finally, a certain subset of students, including Plaintiffs McAllister, Spooney, and Hood paid additional fees "for the right to reside in campus housing and for access to a meal plan providing for on campus dining opportunities."
¶ 5 Plaintiffs and other students started the Spring 2020 Term with on-campus, in-person education and with access to the services for which they paid student fees, housing fees, and on-campus meal fees. "On or about March 11, 2020, in response to the COVID-19 pandemic, Defendant issued a system-wide directive to all" the Universities "requiring that they transition from in-person to online instruction no later than March 23, 2020." As a result, starting on 23 March 2020 through the end of the Spring 2020 Term, "there were no in person classes at" the Universities, "and all instruction was delivered online." Another directive from Defendant to all the Universities "[o]n or about" 17 March 2020 "instruct[ed] students living in campus housing to remain at or return to their perme[n]ant residences." As a result of this directive, the Universities closed their on campus residences and prevented student access to dining facilities. The campus shutdowns also meant students "no longer ha[d] the benefit of the services for which" they paid student fees. Defendant "announced" it would be offering "pro-rated credits or refunds for students who prepaid housing and meal costs for the Spring 2020" Term-and did offer some refunds- but it did not offer refunds for tuition or student fees.
¶ 6 Based on these alleged facts, Plaintiffs filed their Amended Complaint on 30 December 2020. The Amended Complaint includes both breach of contract claims and unjust enrichment claims seeking "refunds . . . on a pro-rata basis" for "tuition, housing, meals, [and student] fees . . . that Defendant failed to deliver for the second half of the Spring 2020" Term after shutting down the Universities' campuses in response to COVID-19. As to all these claims, the Amended Complaint alleges the General Assembly "has explicitly waived sovereign immunity in suits against Defendant" because Defendant "is a body politic" that is, inter alia, "capable in law to sue and be sued in all courts whatsoever." The Amended Complaint also asserts Plaintiffs "bring this action on behalf of themselves and as a class action" on behalf of four classes for each of the four categories of payments: tuition, fees, on-campus housing, and on-campus meals. As a result, the Amended Complaint includes "Class Action Allegations[,]" (capitalization altered), but the class action component of the lawsuit is not at issue in this appeal.
¶ 7 As to the tuition breach of contract claim, the Amended Complaint alleges Defendant offered to Plaintiffs and the proposed class its on-campus "live, in-person education" for the Spring 2020 Term in contrast to its "separate and distinct" online-only educational program. In addition to the descriptions through online and written materials discussed above, Defendant and its Universities differentiated between the two programs with respect to the Spring 2020 Term specifically by differences in how students registered for on-campus versus online instruction and "the parties' prior course of conduct" in starting classes "for which students expected to receive inperson instruction" with such instruction and with class materials with in-person "schedules, locations, and . . . requirements." Plaintiffs and the proposed class then "accepted that offer by paying tuition and attending classes during the beginning of the Spring 2020" Term. The Amended Complaint alleges Defendant then breached the contract by shutting down its campuses and shifting "all classes" to online learning "without reducing or refunding tuition accordingly." Finally as to this claim, the Amended Complaint states "[t]his cause of action does not seek to allege 'educational malpractice'" but instead focuses on how "Defendant provided a materially different product," online learning, from the one Plaintiffs and the proposed class paid for, "live[,] in-person[,] on-campus education[.]" As a result of this breach, Plaintiffs allege they suffered damages "amounting to the difference in the fair market value of the services and access for which they contracted, and the services and access which they actually received."
¶ 8 The Amended Complaint also alleges a breach of contract claim for student fees. Defendant and its Universities offered "services, access, benefits and programs" by "specifically describ[ing] the nature and purpose of each fee" in "publications," in particular in "catalogs . . . and website[s.]" Plaintiffs and the proposed fees class then accepted the terms and paid the fees, thereby forming a contract. The Amended Complaint alleges Defendant then breached the contract by shutting down the Universities' campuses and "cancelling most student activities" halfway through the Spring 2020 Term-thereby not providing "recreational and intramural programs; fitness centers or gymnasiums; campus technology[,] infrastructure[,] or security measures; or Spring intercollegiate competitions"-without giving students any "discount or refund" on "any fees" as Defendant does for "fully online students[.]" As a result of Defendant's breach, Plaintiffs and the rest of the proposed class suffered damages.
¶ 9 The Amended Complaint includes two final breach of contract claims for on- campus housing and meals. The Amended Complaint alleges Defendant offered the relevant Plaintiffs and proposed classes "on-campus housing" and "meals and on-campus dining options" in return for additional fees. The relevant Plaintiffs and proposed class members then accepted by paying those fees. When the Universities shut down their campuses, they "requir[ed] students to move out of on-campus housing facilities" and closed "most campus buildings and facilities, including dining facilities[,]" thereby breaching the contract. Defendant then "issued arbitrary and insufficient refunds" for on-campus housing and meals for most students because the campus shutdowns started earlier than the date applied to pro-rate the refunds. According to the Amended Complaint, the relevant Plaintiffs and proposed class members suffered damages for the additional amounts they should have been refunded.
¶ 10 In the alternative to each of the four breach of contract...
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