North v. State, 85-1831

• Decision Date: 18 February 1987
• Docket Number: No. 85-1831,85-1831
• Citation: 400 N.W.2d 566
• Parties: 37 Ed. Law Rep. 686 Carol NORTH, Appellant, v. STATE of Iowa, Appellee.
• Court: Iowa Supreme Court

Page 566

400 N.W.2d 566

37 Ed. Law Rep. 686

Carol NORTH, Appellant, v. STATE of Iowa, Appellee.

No. 85-1831.

Supreme Court of Iowa.

Feb. 18, 1987.

William L. Meardon and Thomas D. Hobart of Meardon, Sueppel, Downer & Hayes, Iowa City, for appellant.

Charles T. Traw of Leff, Leff, Leff, Haupert & Traw, Iowa City, for appellee.

Considered by REYNOLDSON, C.J., HARRIS, McGIVERIN, WOLLE, and LAVORATO, JJ.

WOLLE, Justice.

Plaintiff Carol North brought this action alleging that officials of the University of Iowa College of Medicine wrongfully refused to readmit her to the school following an authorized one-year leave of absence. She alleged that the State's arbitrary and unreasonable actions amounted to conduct that was actionable as a breach of contract, tort, and civil rights violation. She claimed that the State thereby damaged her by causing a delay in her medical education, additional school expense, mental anguish, and loss of employment opportunities and income. Following a bench trial the trial court entered judgment for the State, finding that the continued enrollment decision she challenged was one reserved for faculty discretion. The court found no enforceable contract, no interference with business expectancy and no violation of civil rights. North assigns as error the trial court's failure to enter judgment in her favor on one or more of the asserted causes of action. We find no merit in her arguments and affirm.

I. Background Facts.

When North was an undergraduate student at the University of Iowa she submitted a written application for admission to the University of Iowa College of Medicine. In the application she disclosed that she had experienced "adolescent adjustment reaction." Her application was accepted, she was enrolled unconditionally in the medical school for the semester beginning in August of 1976, and she successfully completed her first semester of course work.

Unfortunately in the spring of 1977 during her second semester at the medical school North began to experience schizophrenic symptoms similar to those she had encountered as an undergraduate. The symptoms--delusions and catatonic tendencies--caused her increasing difficulty with her schoolwork and required periodic hospitalizations. With psychiatric help North satisfactorily completed that second semester of medical school. During the fall semester of 1977, however, North again fell behind in her schoolwork and this time received permission to finish one course at a later date. Permission was granted by the medical school's student promotions committee which had the responsibility of evaluating student performance, subject to review by faculty members serving on the school's medical council and executive committee (medical/executive committee). By early January of 1978 North still had symptoms of schizophrenia and requested a one-year leave of absence. The associate dean of the college responded with a written letter of approval dated January 5, 1978 that in pertinent part stated:

I have received your letter requesting a one year leave of absence from the medical curriculum. With the understanding that you will have a psychiatric evaluation prior to your return to classes, the leave of absence is granted. Please inform me of your continued intention to return to the medical curriculum in January 1979 by October 1978.

During that leave of absence, North continued psychiatric treatment and worked at the university doing research. In September of 1978 she requested readmission to the medical school for the semester beginning in January of 1979 and furnished the school her psychiatrist's recommendation that she be readmitted in January. North started hemodialysis in November, becoming the university's first patient to receive this experimental treatment for schizophrenia. North's response to hemodialysis was extraordinary; her symptoms virtually disappeared.

In December of 1978 the promotions committee met, reviewed several psychiatric evaluations of North, and voted to send no recommendation to the medical/executive committee. Instead, the promotions committee directed the school's associate dean to prepare a statement of conditions which North would be required to meet in the event of her readmission. The dean drafted ten conditions for readmission, and North and her psychiatrist indicated the conditions were fair and acceptable. The conditions included continued psychiatric care, periodic independent psychiatric evaluation, and a contingency plan in the event the symptoms recurred. Nevertheless, the experimental nature of hemodialysis in the treatment of schizophrenia and the brief duration of North's apparent remission prompted the medical/executive committee to conclude that the interests of both North and the medical school would best be served by postponing the readmission decision for another year. North's administrative appeal of that decision was denied. She continued her research work at the university, but in May of 1979 she also filed an action against the State requesting readmission to the school by way of declaratory and injunctive relief. That lawsuit had not reached trial when North in January of 1980 again applied for readmission to medical school. The medical/executive committee again determined that North should be allowed to continue her studies not unconditionally but subject to conditions like those imposed by the dean and promotions committee the year before. North refused to accept a conditional readmission and subsequently received the degree of medical doctor from Washington University in St. Louis. At the time of trial, she was in her third year of psychiatry residency there.

In March of 1980, North amended her injunction action to request relief from the denial of unconditional readmission to the medical school in January of 1980. Six months later she filed the law action now before us seeking damages from the State on theories of breach of contract, interference with business expectancies, and violation of her civil rights. The law and equity actions were consolidated for trial, but North's graduation from another medical school then mooted the injunction action. Only the damage action is before us for review.

II. Breach of Contract Theory.

North first urges upon us her contract theory of letter offer and acceptance. She argues that the January 5, 1978 letter from the associate dean of the college granting her a leave of absence was accepted by her, forming the basis of an express contract. She contends the school breached that contract when it failed to readmit her once she had satisfied the only conditions to readmission expressed in the letter--reapplication by October of 1978 and submission of a report of psychiatric evaluation.

We have jurisdiction to decide that contract claim because it falls outside the State Tort Claims Act, Iowa Code chapter 25A. We abrogated governmental immunity in breach of express contract actions in Kersten Co. v. Department of Social Services, 207 N.W.2d 117, 122 (Iowa 1973) ("[T]he State, by entering into a contract, waives its defense of governmental immunity and consents to be sued for breach thereof."); accord Jones v. Iowa State Board of Regents, 385 N.W.2d 240, 241 (Iowa 1986).

In reaching the merits of North's contract theory, however, we must be mindful of our limited scope of review. The trial court's findings of fact have the effect on appeal of a special verdict, when they are supported by substantial evidence. See Whiteaker v. State, 382 N.W.2d 112, 114 (Iowa 1986). North had the burden of proving all elements of her contract action, including the existence of an enforceable express contract, but the trial court found she had not proved such a contract. North can prevail in this appeal only if she carried her burden as a matter of law. Liberty Mutual Insurance Co. v. Winter, 385 N.W.2d 529, 532 (Iowa 1986); Whiteaker, 382 N.W.2d at 114. North's evidence is not that strong.

A prerequisite to formation of the contract North postulates is the parties' mutual manifestation of assent to the same terms. Woodburn v. Northwestern Bell Telephone Co., 275 N.W.2d 403, 406 (Iowa 1979); Service Employees International, Local No. 55 v. Cedar Rapids Community School District, 222 N.W.2d 403, 408 (Iowa 1974). The trial court, however, observed that the terms North now ascribes to the associate dean's letter were not those she understood upon its receipt. The trial court wrote:

Dr. North asked for a one year leave of absence because of her health problems. Dr. North recognized that her continuing in the College of Medicine (whether or not the leave of absence was granted) was conditioned on the faculty allowing her to continue in the College of Medicine. She knew that the Student Promotions Committee would pass on her promotion to the second semester of her second year. She also knew that the Medical Council and Executive Committee would review her progress and determine if she would be able to continue. [The associate dean's] letter did nothing more than notify Dr. North that she would be able to continue in the College of Medicine if allowed by the faculty committees. She was aware that the procedures which were used were the same for her as all other students enrolled in the College of Medicine. To claim that [the associate dean's] letter is an enforceable promise which grants her unconditional acceptance in the College of Medicine after a one year period of time is simply untenable.

In sum, the trial court found no factual basis for North's claim that the associate dean's letter and surrounding circumstances constituted an express contract enforceable against the State. The evidence is not so one-sided in North's favor as to mandate a contrary finding as a matter of law.

Because the evidence fully supports the trial court's finding that North and the State had no express contract for her readmission to the medical school, we affirm the judgment...