Gamble v. University System of New Hampshire

• Decision Date: 15 July 1992
• Docket Number: No. 91-271,91-271
• Citation: Gamble v. University System of New Hampshire, 136 N.H. 9, 610 A.2d 357 (N.H. 1992)
• Parties: Andrew GAMBLE and another v. The UNIVERSITY SYSTEM OF NEW HAMPSHIRE and another.
• Court: New Hampshire Supreme Court

Page 357

610 A.2d 357

136 N.H. 9

Andrew GAMBLE and another v. The UNIVERSITY SYSTEM OF NEW HAMPSHIRE and another.

No. 91-271.

Supreme Court of New Hampshire.

July 15, 1992.

Patrick W. Fleming, Hampstead, on the brief and orally, for plaintiffs.

Nelson, Kinder, Mosseau & Gordon, Manchester (Martha V. Gordon on the brief and orally), for defendants.

BROCK, Chief Justice.

The plaintiffs, Andrew Gamble, Jennifer Hodges, Joanne Dowd and Michael Wolf, students at the University of New Hampshire (the University) during the 1990 spring semester, brought suit against the defendants, The University System of New Hampshire and its Board of Trustees, as a result of a mid-semester tuition increase. The Superior Court (Dickson, J.) granted the defendants' motion for summary judgment, from which the plaintiffs now appeal. We affirm in part, reverse in part, and remand for further proceedings.

Andrew Gamble, Jennifer Hodges and Joanne Dowd were in-state students at the University for the 1989-90 academic year. During this time, Michael Wolf, a student at the University of Connecticut, was attending the University pursuant to the New England Regional Compact (NERC). The NERC allows out-of-state students, whose university does not carry the students' desired major, to attend the University. The tuition for these students is the in-state tuition rate plus twenty-five percent.

Prior to the 1989-90 academic year, all graduate and undergraduate students were presented with a "School Catalog," which stated the cost of attending the University for that year. The catalogs informed the students that they would have to pay all bills for the spring semester "in full" on or before the last day of registration, January 23, 1990. Both the undergraduate and graduate catalogs stated that the University reserved the right to revise its schedule of tuition and fees (hereinafter "reservation of rights").

In the fall of 1989, the State experienced fiscal problems and the Governor proposed a State spending cut of five to ten percent. State appropriations to the University would be reduced by an equal percentage. In addition to freezing faculty positions and cutting other expenses, the University was forced to consider a tuition increase. The possibility of a tuition increase was extensively publicized in articles and editorials of several local newspapers. However, because it would not be known until mid-February whether the budget cut would take place, the University was unsure whether a tuition hike would actually be necessary.

Anticipating the necessity for a tuition increase, the University sent letters notifying all in-state undergraduate students of the possibility of a cost increase on December 1, 1989. (The increase would not be imposed on out-of-state students who were already paying an unsubsidized price for their education.) Although the exact amount of the tuition increase was not known at the time, the letter stated that "[t]he recommended increases could amount to between $200 and $400." A similar letter was sent to all in-state graduate students on December 18, but no such letters were sent to any NERC students.

Each plaintiff paid the spring semester bill as required and received a receipt that indicated that the balance due was "$0.00." Then, on February 28, after the semester had begun, each student was notified that the tuition was being increased to reflect the legislature's seven and one-half percent reduction in State support for the University.

The plaintiffs brought suit against the University in a four-count complaint, alleging: (1) breach of contract; (2) negligence; (3) a violation of the Consumer Protection Act, RSA chapter 358-A; and (4) a deprivation of constitutional rights. The defendants moved for summary judgment on all four counts, and the plaintiffs moved for summary judgment on the breach of contract and constitutional claims. On May 23, 1991, the defendants' motion was granted. The plaintiffs now appeal, challenging the trial court's dismissal of their breach of contract and consumer protection claims.

The plaintiffs assert that the defendants breached their contract by changing the contract terms, i.e., charging tuition above that set forth in the catalog after the start of the semester, after the plaintiffs had completed their obligation under the contract. Further, according to the plaintiffs, because the contract was one of adhesion, any ambiguous terms must be construed against the defendants as drafters of the document. The plaintiffs also claim that summary judgment was inappropriate regarding their consumer protection claim, in that material issues of fact still exist.

The defendants rely on the language in the catalog, the letters that were sent to the students and the extensive media coverage of the situation to show that the plaintiffs could have reasonably expected an increase in the cost of their education. Therefore, the defendants argue the tuition increase did not constitute a breach of contract. Further, according to the defendants, the plaintiffs' consumer protection claim must be denied, as a matter of law, if the defendants had the contractual right to raise tuition. In the alternative, the defendants claim that the uncontroverted facts fail to demonstrate any bad faith.

The parties do not dispute that the agreement between them is primarily governed by contract principles. The relationship between a university and its students is distinctive, however, and a strict doctrinal approach is inappropriate. Lyons v. Salve Regina College, 565 F.2d 200, 202 (1st Cir.1977), cert. denied, 435 U.S. 971, 98 S.Ct. 1611, 56 L.Ed.2d 62 (1978). Thus, although the first step of analysis is to examine the language of the contract under the basic tenets of contract law, the parties' unique relationship must also be considered.

"[A]s a general rule, the proper interpretation of a contract is ultimately a question of law for this court, and we will determine the meaning of the contract based on the meaning that would be attached to it by reasonable persons." Goodwin Railroad, Inc. v. State, 128 N.H. 595, 602, 517 A.2d 823, 829 (1986). In interpreting the terms of the contract, we will consider the objective intent of the parties at the time the contract was made. C & M Realty Trust v. Wiedenkeller, 133 N.H. 470, 476, 578 A.2d 354, 357 (1990); see also Kilroe v. Troast, 117 N.H. 598, 601, 376 A.2d 131, 133 (1977) (intentions of parties to contract are determined based on terms of agreement taken as a whole and contract will be given meaning that would be attached to it by a reasonable person); Citizens Nat. Bank v. Hermsdorf, 96 N.H. 389, 393, 77 A.2d 862, 866 (1951) (standard for determining intent is meaning a reasonable person in plaintiff's position would attach to contract). Any determination of the intent of the parties is ultimately to be made by this court. R. Zoppo Co. v. City of Dover, 124 N.H. 666, 670, 475 A.2d 12, 15 (1984).

According to the plaintiffs, the catalog quoted a specific price for tuition and the language that all bills must be paid "in full" prior to the end of registration. Therefore, the plaintiffs argue, upon paying their tuition prior to the start of the semester and receiving a receipt marked with a zero balance, their obligation under the contract was completed. This, they contend, constitutes a unilateral contract in that they have fully performed, but the other party has yet to fulfill its promise. In such an agreement, once performance has occurred, the contract is formed and may not be unilaterally altered by either party. Thus, the plaintiffs conclude, because the defendants could not raise the tuition without the students' consent, it was reasonable for them to expect that there would be no increase in the tuition for the spring semester.

Contrary to the plaintiffs' assertion, however, their obligations under the contract were not completed simply by paying their tuition bill. The relationship between the University and the student is ongoing throughout the semester: the University must provide the student with a worthwhile education and the student must perform "financially, academically, and behaviorally in accordance with the college rules and regulations." Merrow v. Goldberg, 672 F.Supp. 766, 774 (D.Vt.1987). Therefore, because the plaintiffs had not, and could not have, fully performed prior to the end of the semester, the contract is not a unilateral one requiring the school to provide an education to the student upon receipt of the tuition payment, regardless of the actions of the student throughout the semester. It follows that the plaintiffs' claim that they fulfilled their obligation and the University breached the contract due to the unilateral nature of the contract is without merit.

The plaintiffs next argue that the contract is one of adhesion; thus, any ambiguous language must be construed against the defendants as the drafter of the document. According to the plaintiffs, the phrase "reserves the right to [raise] ... tuition" is ambiguous in that it is unclear as to when the right terminates. Therefore, they argue, it must be construed in their favor and be read to terminate upon the last day of registration. The defendants contend that the language is not ambiguous and that it gives them the authority to raise the tuition rate at any time prior to the end of the academic year.

The language of a contract is ambiguous if the parties...