Kent Literary Club of Wesleyan Univ. At Middletown v. Wesleyan Univ.

• Decision Date: 05 March 2021
• Docket Number: SC 20226
• Parties: KENT LITERARY CLUB OF WESLEYAN UNIVERSITY AT MIDDLETOWN et al. v. WESLEYAN UNIVERSITY et al.
• Court: Connecticut Supreme Court

338 Conn. 189

257 A.3d 874

KENT LITERARY CLUB OF WESLEYAN UNIVERSITY AT MIDDLETOWN et al.

v.WESLEYAN UNIVERSITY et al.

SC 20226

Supreme Court of Connecticut.

Argued May 1, 2019

Officially released March 5, 2021^**

Aaron S. Bayer, with whom was Benjamin M. Daniels, for the appellants (defendants).

Richard J. Buturla, with whom was Bryan L. LeClerc, for the appellees (plaintiffs).

Robinson, C. J., and Palmer, McDonald, D'Auria, Mullins, Kahn and Ecker, Js.^*

PALMER, J.

This appeal involves a commercial dispute arising in the unique context of an undergraduate housing program. The plaintiffs are Kent Literary Club of Wesleyan University at Middletown (Kent), which owns a Delta Kappa Epsilon fraternity house on the Wesleyan University campus (DKE House); the Gamma Phi Chapter of Delta Kappa Epsilon at Wesleyan (DKE); and Jordan Jancze, who, at the time of trial, was a Wesleyan student and DKE member.¹ The defendants include Wesleyan University (Wesleyan or the university); Wesleyan's president, Michael S. Roth; and Wesleyan's vice president for student affairs, Michael J. Whaley. Following Wesleyan's September, 2014 announcement that all residential fraternities on campus would be required to coeducate, and following a series of unsuccessful negotiations between the parties to establish a mutually agreeable coeducation plan, Wesleyan notified Kent and DKE that they would no longer be eligible to participate in the university's program housing system as of the 2015–2016 academic year and, therefore, that Wesleyan students no longer could reside in or use the DKE House. In response, the plaintiffs commenced the present action, alleging promissory estoppel, negligent misrepresentation, tortious interference with business expectancies, and violations of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110a et seq., and seeking damages, attorney's fees and costs, and injunctive relief. Following a jury trial, the jury returned a verdict for the plaintiffs on all counts and awarded Kent $386,000 in damages. In addition, the trial court, acting pursuant to CUTPA, awarded the plaintiffs $398,129 in attorney's fees and $13,234.44 in costs, and issued a mandatory injunction requiring, among other things, that Wesleyan enter into a new contract with Kent and DKE, resume housing Wesleyan students in the DKE House, and give DKE three years in which to coeducate.

On appeal, the defendants raise various challenges to the judgment, including claims concerning the trial court's jury instructions and the sufficiency of the evidence with respect to both liability and damages. The defendants also contend that the trial court abused its discretion or otherwise acted contrary to law in awarding the plaintiffs injunctive relief. We conclude that, although there was sufficient evidence for the jury to find the defendants liable, the trial court failed to properly instruct the jury regarding the legal effects of the parties' contract and the proper means of calculating damages.² Accordingly, we reverse the judgment of the trial court and remand the case for a new trial.

IFACTS AND PROCEDURAL HISTORY

The relevant facts, which were developed at trial, and procedural history may be briefly summarized as follows. Wesleyan is a small, private, liberal arts university located in the city of Middletown. With a few exceptions not relevant to the present action, Wesleyan requires all undergraduate students to reside on campus, primarily in university owned housing.

The university considers residential life to be an important component of the undergraduate education experience. In lieu of residing in traditional dormitories, students can opt to enter Wesleyan's program housing system and live in a theme house based on shared hobbies, experiences, cultural interests, or identities. Students who wish to live in residential fraternities—there are no residential sororities at Wesleyan—must do so via program housing. During the 2014–2015 academic year, three all-male fraternities, one of which was DKE, operated houses on campus and participated in Wesleyan program housing.

In order to participate in program housing, to have Wesleyan students placed in their house, and to receive those students' housing dollars as rent, Kent and DKE, like the other residential fraternities, were required to enter into an annual Greek Organization Standards Agreement with Wesleyan. Among other things, that contract (1) allows either party to terminate the relationship for any reason upon thirty days' notice, (2) requires the fraternity to comply with and be bound by all university rules and policies, which the university is permitted to amend or modify at any time, (3) requires the university to enforce and apply the provisions of the agreement in a manner consistent with how it treats other residential Greek organizations, and (4) provides that the university's failure to enforce any provision of the agreement shall not be construed as a waiver with respect to any subsequent breaches. In the present action, the plaintiffs have never contended that Wesleyan breached or modified that agreement.

DKE is the local chapter of an international fraternal organization, Delta Kappa Epsilon, whose charter bars local chapters from admitting women as members. DKE has existed as a Greek fraternal organization recognized by Wesleyan since 1867. Kent is a Connecticut, nonstock corporation that is operated by Wesleyan's DKE alumni and has owned the DKE House at 276 High Street, in the center of the Wesleyan campus, since 1888.

In the spring of 2014, following a series of incidents in which young women at Wesleyan claimed to have been raped at other fraternity houses³ and Wesleyan was named as a defendant in resulting lawsuits, it began to participate in what had become a nationwide debate regarding the role of fraternities on college campuses. Specifically, the administration began to consider whether all-male residential fraternities contribute to sexual assault and harassment, and whether maintaining such fraternities as program housing options was consistent with the university's prioritizing of gender equity, inclusiveness, and the safety of its female students. At the same time, according to Scott Karsten, a DKE alumnus, the plaintiffs sought to take proactive steps to be in the forefront of Wesleyan's educational effort to combat sexual assault and binge drinking, such as enlisting a physician to give an educational program for DKE members on bystander intervention.

After consulting with various stakeholders and considering various options, Roth announced, on September 22, 2014, that Wesleyan intended to require that residential fraternities become fully coeducational over the next three years. The announcement stated that "women as well as men must be full members and [well represented] in the body and leadership of the [residential fraternity] organization." It further stated that the university "looks forward to receiving plans from the residential fraternities to [coeducate]" and would "work closely with them to make the transition as smooth as possible."

In the months that followed, the parties engaged in a series of negotiations and communications aimed at achieving a mutually agreeable plan for coeducating the DKE House. The parties place very different spins on the nature of those negotiations.

Wesleyan contends that it tried to meet the plaintiffs half way, such as by agreeing to allow DKE to coeducate at the residential level—bringing female residents into the DKE House and giving them equal say in house management and programming—but not at the organizational/membership level, that is, not requiring DKE to accept women as members of the fraternity itself. In the university's view, however, the plaintiffs failed to negotiate in good faith and chose instead to stonewall and delay the negotiations, ultimately via litigation, in a calculated effort to outlast the administration and, in particular, Roth's tenure as president.

The plaintiffs, for their part, contend that it was Wesleyan that failed to negotiate in good faith. They argue that Wesleyan recognized at the outset that it would "have to develop goals and benchmarks for ‘meaningful coeducation’ " but that the university never provided any such goals or benchmarks to the plaintiffs to aid them in drafting an acceptable coeducation plan. They emphasize that they submitted a preliminary coeducation plan for the DKE House on January 5, 2015, that complied with Wesleyan's stated requirements and was more detailed than the plan submitted by Psi Upsilon, another residential fraternity that was permitted to remain in program housing.⁴ They argue that Roth never intended to allow them to coeducate solely at the residential level and that, in fact, his coeducation requirement was merely a pretext to sever ties with DKE and to force Kent to sell the centrally located DKE House to the university. Because the jury found for the plaintiffs on all counts, we must assume that the jury found their account, or at least some substantial portion thereof, to be more persuasive.

In any event, February 7, 2015, the date of Wesleyan's annual student housing selection, arrived without an agreement between the parties. Accordingly, on February 13, 2015, Whaley wrote to inform the plaintiffs that Wesleyan was terminating their Greek Organization Standards Agreement, effective June 18 of that year. Since that time, Wesleyan student members of DKE, such as Jancze, have been denied the opportunity to reside in the DKE House or even to use the house for nonresidential purposes, such as for studying and chapter meetings. This action effectively rendered the property, which has sat empty, useless to the plaintiffs.⁵

The plaintiffs responded by filing the present action. The operative third amended complaint alleges promissory estoppel, negligent misrepresentation, tortious interference with business expectancies, and various...