King v. Baylor Univ.

• Decision Date: 23 August 2022
• Docket Number: 21-50352
• Parties: Allison King, Plaintiff-Appellant, v. Baylor University, Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Allison King, Plaintiff-Appellant, v. Baylor University, Defendant-Appellee.

No. 21-50352

United States Court of Appeals, Fifth Circuit

August 23, 2022

Appeal from the United States District Court for the Western District of Texas USDC No. 6:20-CV-504

Before Jones, Higginson, and Duncan, Circuit Judges.

EDITH H. JONES, CIRCUIT JUDGE

Allison King signed a Financial Responsibility Agreement ("FRA") with Baylor University to secure her enrollment for the Spring 2020 semester. The FRA required King to pay Baylor for "educational services," and she paid her tuition bill in full. During the second-half of the semester, Baylor responded to the COVID-19 pandemic by severely limiting on-campus activities and opportunities while conducting classes remotely. It did not, however refund any tuition or fees. King's refund suit relies on various doctrines of contract law. We espy a potential ambiguity in the definition of "educational services" and remand for further consideration of that issue. Consequently, we AFFIRM IN PART, REVERSE IN PART and REMAND for further proceedings consistent with this decision.

I. BACKGROUND

King followed the same process as all Baylor undergraduates to enroll for the Spring 2020 semester. First, she "logged on to Baylor's student portal, BearWeb . . ., navigated to the Add or Drop Classes page, selected Spring 2020 as the Term for which [she] wish[ed] to enroll, and either entered the course numbers to register . . ., or used the class search function to find desired classes and register." Baylor listed available undergraduate classes in a catalog that included the following disclaimers:

It is sometimes necessary or appropriate to change the programs offered. Baylor University retains the right to terminate or change any and all aspects of its educational and other programs at any time without prior notice.

....

The provisions of this catalog do not constitute a contract, expressed or implied, between Baylor University and any applicant, student, student's family, faculty, or staff member. Baylor University reserves the right to withdraw courses at any time, or change fees, tuition, rules, calendar, curricula, degree programs, degree requirements, graduation procedures, and any other requirement affecting students. Changes will become effective at the time the proper authorities so determine, and the changes will apply to both prospective students and those already enrolled. This catalog is a general information publication only, and it is not intended to, nor does it contain all regulations that relate to students.

King attended her classes throughout the entire semester.

Second, after receiving a bill from Baylor, King had "to either pay all of the charges on [her] bill or enroll in a payment plan." Before the Spring 2020 semester commenced, King paid $21,421.00 in tuition, a "General Student Fee" of $2,261.00, $1,923.14 for meals (including $1,773.14 toward a meal plan and $150.00 in dining dollars), a "Chapel Fee" of $90.00, and a "Course Lab Fee" of $50.00. King satisfied her financial obligation.

Third, King had to log onto BearWeb and agree that she was "attending Baylor University in [Spring 2020]" and that she read, understood, and agreed to be bound by the FRA during that semester and all future semesters. Numerous class offerings and two payment options were available to King, but she had only one "choice" in the end: Affirm her semester of attendance and consent to the FRA's terms or face disenrollment. King executed the FRA on December 20, 2019. The following portions are most pertinent:

I understand that when I register or enroll in any class at Baylor University (Baylor) or receive any service from Baylor, I accept full responsibility to pay all tuition, fees, and other associated costs assessed as a result of my registration and/or receipt of services. I further understand and agree that my registration at Baylor and acceptance of the terms of this Financial Responsibility Agreement (Agreement) constitutes a promissory note agreement (i.e., a financial obligation in the form of an educational loan as defined by the U.S. Bankruptcy Code at 11 U.S.C. 523(a)(8)) in which Baylor is providing me educational services, deferring some or all of my payment obligation for those services, and I promise to pay for all assessed tuition, fees, and other associated costs by the scheduled due date as reflected in emails to me; in the invoices, statements, and schedules within the My Account tab of Baylor's electronic billing called the E-Bill System; or in the following link: www.baylor.edu/sfs/duedates.

This Agreement supersedes all prior understandings, representations, negotiations, and correspondence between the student and Baylor, constitutes the entire agreement between the parties with respect to the matters described, and shall not be modified or affected by any course of dealing or course of performance.

The Spring 2020 semester began on January 13th and was scheduled to conclude on May 11th. "But on March 11, 2020, as a result of the COVID-19 pandemic, Baylor announced that spring break would be extended one week, through March 22, 2020, and that beginning on March 23, 2020, all on-campus classes would be moved online for the next two weeks, through April 3, 2020." Then, on March 16th, Baylor notified students that it would "extend online instruction . . . for the remainder of the Spring 2020 semester." Baylor further advised students that "dining options on campus [would] be significantly limited, . . . recreational opportunities [would] be unavailable, ....[and] that all university activities, events, conferences, and large gatherings would be suspended through the end of the semester." "Given the closure of Baylor's campus," King alleges that she "lost approximately half of the Spring 2020 semester's on-campus classes, activities, and meals." Baylor, according to King, could have remedied these losses by refunding tuition and fees along with meal plans and dining dollars.

With respect to tuition, Baylor decided not to issue any refunds. King, however, complains that she "paid tuition for an on-campus experience with in-person instruction and access to on-campus facilities." King insists that "Baylor charges significantly less for . . . online programs[,]" and that Baylor breached an implied contract with her by not refunding the difference between the amount she paid for in-person educational services and the amount it would have charged for a half-semester of online instruction.

To demonstrate the alleged price disparity between in-person and online classes, King observes that "a student seeking an MBA from Baylor through the traditional on-campus program would have been charged approximately ....$3,570 per term hour", while "the same student seeking the same degree through Baylor's online [MBA] program would have been charged just $1,068 per term hour, representing a 70% discount." She attributes the premium price for in-person instruction to a variety of experiences and amenities that are only available to those physically present on Baylor's campus.^[1]

King concedes that there was no difference in "quality between the in-person, on-campus education at Baylor vs. the online-only education from Baylor." Instead, she emphasizes "the simple premise that the in-person, on-campus educational experience commands a higher price than the online-only educational experience." In other words, King is upset about the price she paid for, as opposed to the quality of, Baylor's online classes.

Baylor also decided not to refund money paid for fees, despite the fact that the General Student Fee, Course Lab Fee, and Chapel Fee^[2] "specifically cover on-campus facilities and activities." King does not dispute that Baylor continued to provide many student services online (and that the health center remained operational), but she faults Baylor for not providing these services in-person as agreed to and for then refusing to refund the fees.

Baylor did prorate meal plans "by the daily rate associated with the plan . . ." and gave students a commensurate credit while also rolling any unused dining dollars forward. And certain dining facilities remained operational, though King was unable to return to campus. King received credits for her "meal plan[] and dining dollar payments[,]" but she insists that Baylor must instead refund those payments because she "lost approximately half of the Spring 2020 semester's . . . meals."

King filed this class action against Baylor in June 2020 on behalf of herself and "[a]ll students who paid, or other persons who paid on a student's behalf, Baylor any of the following costs for the Spring 2020 semester: (a) tuition and/or (b) Fees and/or (c) meal plans ...."^[3] She asserted a breach of contract claim, alternatively sought unjust enrichment, and requested refunds of student fees and prorated tuition reimbursement based on the difference between the fair market value of on-campus education and the online educational product.

Baylor moved to dismiss, contending that the educational malpractice doctrine barred King's claims, and that she otherwise failed to state claims for breach of contract or unjust enrichment.

The magistrate judge recommended granting Baylor's motion and dismissing King's claims with prejudice.^[4] The district court adopted the recommendation over King's objections. The district court found that the FRA was a valid, complete, and integrated contract between Baylor and King; that it did not promise in-person classes or an on-campus educational experience; and that it exclusively governed the parties' relationship. King timely appealed from the adverse judgment.

II. STANDARD OF REVIEW

Federal Rule of Civil Procedure 8(a)(2) re...