Kerr v. Vatterott Educ. Ctrs., Inc.

• Decision Date: 26 August 2014
• Docket Number: No. WD 76903.,WD 76903.
• Citation: 439 S.W.3d 802
• Court: Missouri Court of Appeals
• Parties: Jennifer KERR, Respondent, v. VATTEROTT EDUCATIONAL CENTERS, INC., Appellant.

439 S.W.3d 802

Jennifer KERR, Respondent

v.VATTEROTT EDUCATIONAL CENTERS, INC., Appellant.

No. WD 76903.

Missouri Court of Appeals, Western District.

Aug. 26, 2014.

Mark Arnold, James Monafo, Elizabeth Bozicevic, William Price, Jr., St. Louis, MO, Jeffery McPherson, Clayton, MO, for Appellant.

Martin Meyers, Kevin Jones, Leonard Stephens, Gene Graham, Independence, MO, for Respondent.

Before Division Three: GARY D. WITT, P.J., JOSEPH M. ELLIS, and THOMAS H. NEWTON, JJ.

Opinion

THOMAS H. NEWTON, Judge.

Vatterott Educational Centers, Inc., doing business as Vatterott College (Vatterott), appeals the trial court's judgment in favor of Ms. Jennifer Kerr. Ms. Kerr sued Vatterott for damages under the Missouri Merchandise Practices Act (MMPA), sections 407.010 to 407.130.¹ A jury found Vatterott liable to Ms. Kerr for its deceitful practices in selling a certain educational program offered by its institution. The jury awarded Ms. Kerr compensatory and punitive damages. On appeal, Vatterott challenges the denial of its motion for a directed verdict, the submission of a certain damages instruction, and the amount of the punitive damages award. We affirm and remand.

Factual and Procedural Background

In late 2008, Ms. Kerr decided to return to school to become a registered nurse. In 2009, a representative at Concorde College spoke to Ms. Kerr, during a campus visit, and informed her that the institution did not offer a Nursing Program, but offered a Medical Assistant Program (MA Program). Ms. Kerr felt that the MA Program would not assist her in pursuing a nursing career, so she left. She then contacted Vatterott to determine what programs it offered.

In 2009, Vatterott's catalog advertised two medical programs: (1) MA Program and (2) Medical Office Assistant (MOA) Program. The MA Program was described as a 90–week program, during which students received administrative and clinical training; the MOA Program was described as having a duration of 60 weeks, during which students learned only “administrative clerical duties.” At the time, the MA Program cost $33,100, and the MOA Program cost $22,300.

Ms. Leah Lehman, a Vatterott admissions coordinator, met with Ms. Kerr in her office in March 2009. Ms. Kerr told Ms. Lehman that she wanted to become a registered nurse and that she was a single mother who needed to work. Ms. Lehman told Ms. Kerr that Vatterott did not have a nursing program, but had a “condensed” MA Program. Ms. Lehman told Ms. Kerr that she would get “more [there] faster,” that “everything [she would] get in medical assisting wa [s] the same as [the classes] in nursing,” and that she could take the credits with her and “get done faster.” Additionally, Ms. Lehman told Ms. Kerr that she could earn money working as a medical assistant while pursuing her nursing degree. Ms. Lehman tried to get her to enroll right away, but Ms. Kerr told her that she would think about it.

Soon after, Ms. Kerr returned to Vatterott and again spoke to Ms. Lehman. Ms. Kerr enrolled later that day. Ms. Kerr did not receive a catalog that day, but she had seen one the first day that the MA Program was explained to her. She inquired about the letters, “MOA,” appearing before the course numbers in the catalog listings under the MA Program, and Ms. Lehman told her they stood for the “Medical Office Assistant” Program, which was “one in the same.” Around the same time, Ms. Lehman told Ms. Kerr that the MA Program was about $21,000; she was also shown a lab fee of $1,200.

Ms. Lehman gave her a tour of the facility, showing Ms. Kerr the classrooms and the technological lab. She told Ms. Kerr that her hands-on training for the clinical part of the MA Program would occur in the lab. Ms. Lehman filled out the enrollment contract for the MOA Program, slid the contract to Ms. Kerr, and told her where to sign it. Ms. Kerr complied.

Ms. Kerr was then sent to meet with one of Vatterott's financial aid advisors, Ms. Barbara Boone. With Ms. Boone's help, Ms. Kerr obtained federal loans and grants to finance her education. At this time, neither Ms. Lehman nor Ms. Boone told Ms. Kerr that she would need to pay an additional $10,000 to participate in the clinical portion of the MA Program. A month later, Ms. Kerr filled out an orientation document and began the program a few days later.

Just before completing the MOA Program,² Ms. Kerr was told to report to the financial aid office because she was on a list to proceed to the MA Program. Ms. Kerr, along with her classmates, was upset because she and they believed that they all had already enrolled in and paid for the MA Program. Once in the office, Ms. Boone told Ms. Kerr that her financial aid had covered only the MOA Program and that she needed to take out an additional loan to pay for the MA Program or “drop.” Ms. Kerr told Ms. Boone that she would think about it.

Ms. Kerr addressed her concerns with Ms. Stephanie Hankins, the Director of the Medical Program at the time, about being misled into believing that the clinical portion was included in the program in which she had already enrolled and financed. Ms. Hankins told her that none of her classes would transfer into nursing. Afterward, Ms. Kerr declined to enroll in the MA Program. She finished her last phase of the MOA Program from home. In 2010, she graduated with a Certificate of Completion rather than an Associate of Occupational Studies, which she would have received if she had enrolled in and completed the MA Program. Ms. Kerr was unable to obtain a job in the medical field with the certificate, nor could she use the credits toward a nursing degree.

In May 2012, Ms. Kerr sued Vatterott for compensatory (actual) and punitive damages, alleging that Vatterott had “engaged in unlawful merchandising practices in violation of the [MMPA].” Specifically, Ms. Kerr alleged that Ms. Lehman's statements and conduct toward Ms. Kerr exemplified Vatterott's “pattern and practice of using deception, fraud, false pretense, false promise, misrepresentation, and unfair practices in connection with the sale or advertisement of merchandise.”

At the jury trial, Ms. Kerr testified to the above facts. Ms. Kerr also testified that she used the technology lab only two or three times during the 60–week period and that her Vatterott education had zero value. Additionally, former Vatterott graduates testified to similar experiences with enrollment and later discovering that the MA Program was separate and required an additional fee. Former Vatterott employees testified that those admission practices were common and top Vatterott employees were made aware of them, as early as 2007. Ms. Lehman's former supervisor, the Director of Admissions from 2009 to 2011, testified that Ms. Lehman was terminated due to dishonesty concerning an application. She further testified that a student could not enroll in the MA Program without first completing the MOA Program, although it was represented that way. Ms. Hankins, the former Director of the Medical Program, also testified that Vatterott merged the MOA Program into the MA Program in 2010. She also testified that Vatterott's advisory board suggested years earlier that the MOA Program be removed. Ms. Kerr adduced evidence that she owed $27,962.23 in student loans.

Vatterott adduced evidence from employees and former employees in an attempt to contravene the evidence of unfair practices in admissions. One of Vatterott's career services employees testified that the benefit of the Certificate of Completion to its holder was that he or she was the more attractive applicant for office positions as compared to an applicant without one. At both the close of the plaintiff's case and at the close of evidence, Vatterott moved for a directed verdict. The trial court denied both motions.

The jury returned a verdict in favor of Ms. Kerr. It awarded her $27,676.96 in actual damages and $13,000,000 in punitive damages. The trial court entered judgment to reflect the verdict. Several post-trial motions were filed. As a result, the trial court amended the judgment to award Ms. Kerr $27,696.96 in actual damages, $2,078,679.80 in punitive damages,³ and $388,059.00 in attorney fees. Vatterott appeals.

Legal Analysis

Vatterott raises four points. In the first and second points, Vatterott argues that the trial court erred in denying its motion for directed verdict and entering judgment against it because Ms. Kerr did not have a submissible MMPA case. First, Vatterott asserts that the MMPA claim was not submissible to the jury because Ms. Kerr did not “purchase her education primarily for personal, family[,] or household purposes,” as required under MMPA. Second, Vatterott asserts that there was no submissible MMPA claim of deception or causation because the contemporaneous documents that Ms. Kerr signed “fully disclosed the truth.”

In reviewing the denial of a directed verdict motion, we are limited to determine whether a submissible case was made. Kelly v. State Farm Mut. Auto. Ins. Co., 218 S.W.3d 517, 520 (Mo.App.W.D.2007). In doing so, we view the evidence and all reasonable inferences from it in the light most favorable to the plaintiff and disregard all contrary evidence. Oliver v. Ford Motor Credit Co., LLC, 437 S.W.3d 352, 357–58 (Mo.App.W.D.2014). However, our review becomes de novo when “the denial of a directed verdict is based upon a conclusion of law.” Id. A submissible case is made if the plaintiff has presented “substantial evidence for every fact essential to liability.” Kelly, 218 S.W.3d at 520. “[W]e will reverse the jury's verdict for insufficient evidence only where there is a complete absence of probative fact to support the jury's conclusion. Thus, ‘[a] directed verdict is inappropriate unless reasonable minds could only find in favor of the defendants.’ ” McGinnis v. Northland Ready Mix, Inc., 344 S.W.3d 804, 809 (Mo.App.W.D.2011) (internal quotation marks and citation omitted).

“Civil actions may be brought under the MMPA to recover actual damages...