Taylor v. Univ. of the Cumberlands
| Decision Date | 07 February 2017 |
| Docket Number | Civil No: 6:16-cv-109-GFVT |
| Parties | DR. JAMES TAYLOR and MRS. DINAH TAYLOR, Plaintiffs, v. UNIVERSITY OF THE CUMBERLANDS, Defendant. |
| Court | U.S. District Court — Eastern District of Kentucky |
Dr. James Taylor was employed as President of the University of the Cumberlands for 35 years beginning in August of 1980. Following his retirement from that position, and after serving as Chancellor of the University for a short time, Dr. Taylor insisted on enforcement of a disputed agreement made between the University and Dr. and Mrs. Taylor. The University refused to fulfill the terms of the disputed agreement which, among many benefits, provide Dr. James Taylor and Mrs. Dinah Taylor with compensation for life following Dr. Taylor's retirement from the position of President. Subsequently, Dr. Taylor brought suit against the University alleging breach of contract, promissory estoppel, slander, intentional infliction of emotional distress, unjust enrichment, and seeking reformation. In the alternative to a breach of contract claim, Dr. Taylor alleges that the University terminated benefits protected under the Employee Retirement Income Security Act of 1974 ("ERISA"). Presently before the Court is the Defendant's Motion to Dismiss [R. 12] and Supplemental Motion to Dismiss [R. 18], which, for the reasons set forth below, will be GRANTED in part and DENIED in part.
Given the present context, the factual summary that follows is taken from the amended complaint [R. 16] and construed in favor of the plaintiff. See Crugher v. Prelesnik, 761 F.3d 610, 614 (6th Cir. 2014) (citation omitted). Dr. James Taylor was employed as President of the University of the Cumberlands for 35 years beginning in August of 1980. [R. 6, ¶ 4.] Dr. Taylor was President of the University during times of significant expansion and development, including the transition from Cumberland College to the University of the Cumberlands. The Plaintiff alleges that Dr. Taylor's compensation was "significantly lower than the Presidents of other similarly situated colleges." [Id., ¶ 7.]
The Plaintiffs also allege that, through a series of University Board of Trustees meetings beginning in October of 2005 and continuing to October, 2015, the University entered into and reaffirmed commitment to an agreement to provide Dr. James Taylor and Mrs. Dinah Taylor with compensation for life following Dr. Taylor's retirement from the position of President. The agreement that was made on April 19, 2012, [see R. 16-1] was first discussed generally at the October 21, 2005, Board of Trustees meeting for the University. [R. 16, ¶ 8.] During a closed executive session, the plaintiffs allege the board unanimously adopted a resolution made by Trustee Bill Hacker and seconded by Trustee Dave Huff that would "continue Dr. Taylor and Ms. Dinah Taylor's salary and benefits following his retirement from the position of President, and to appoint him as Chancellor of the University immediately thereafter." [Id.]
The resolution adopted by the Board explicitly stated, "In the event Dr. Taylor predeceases his wife, such compensation and benefits shall go to Dinah Taylor," and that the University Bylaws and President's contract shall be amended "to include the establishment of theposition of Chancellor and the salary and benefits for Dr. and Mrs. Taylor." [Id., ¶ 8(a)-(b).] Jim Oaks, Chairman of the Board of Trustees, hired the law firm of Guenther, Jordan & Price, P.C. to prepare the necessary amendments. [Id., ¶ 9.] The agreement itself, which the parties refer to as the "disputed agreement" or the "Taylor Agreement," was not further addressed by the Board until seven years later at the April 19, 2012, meeting. Plaintiffs state that the "Taylor agreement was unanimously approved by the Board of Trustees on that date," and have attached the signed agreement as Exhibit A to the Complaint. [Id., ¶ 11.] The agreement was prepared by attorney Steven J. Moore and signed by Dr. Taylor, Mrs. Taylor, Jim Oaks, the "University of the Cumberlands Authorized Representative," and a notary public. [See R. 16-1.]
The Taylor Agreement states that the University agrees to provide a number of retirement benefits to Dr. and Mrs. Taylor after his retirement from the Presidency including health insurance benefits, continued pay of Dr. Taylor's full salary, and the University agreed to provide the Taylors with a residence or apartment in Williamsburg. [R. 16, ¶ 12.] These benefits were to be provided for the lives of Dr. and Mrs. Taylor. At the time of his retirement on October 15, 2014, the complaint states that the Board "unanimously reconfirmed the University's commitment to provide a benefit package for Dr. and Mrs. Taylor to include salary in effect on January 1, 2015, all previously approved insurance for Dr. and Mrs. Taylor, plus all other perks they were receiving at that time." [Id., ¶ 13.] Dr. Taylor stepped down as President and entered the role of Chancellor while Mrs. Taylor "continued to serve as ambassador for the University." [Id., ¶ 14.] The University contests the Plaintiffs' description of Board action at the Executive Sessions and challenges the validity and accuracy of the minutes that the Plaintiff referenced in the complaint.
After Dr. Taylor's retirement, the University attempted to reduce the amount of benefits owed to Dr. and Mrs. Taylor by offering Dr. Taylor a one-year renewable contract that provided for a reduced salary that was significantly less than had been provided for in the disputed agreement. [R. 16, ¶ 15.] The University warned Dr. Taylor that failure to accept this one-year renewable contract would result in the loss of all prior benefits including his "University owned apartment in Williamsburg, KY, the University owned vehicle he drives, and the cellular telephone he uses, all of which were benefits to him under the Taylor Contract." [Id.] Despite the threat of losing all benefits, Dr. Taylor refused these offers and insisted on enforcement of the Taylor Agreement as originally negotiated by the parties. [Id.] Subsequently, the University informed Dr. and Mrs. Taylor that "their Agreement . . . will not be honored and their retirement benefits have been terminated." [Id., ¶ 16.]
Plaintiffs allege that the Taylor Agreement was valid and that the University has breached the contract by refusing to pay benefits to Dr. and Mrs. Taylor. [R. 16, ¶¶ 17-20.] In the alternative, Plaintiffs allege that the Taylor Agreement constituted a "top hat ERISA pension plan and a welfare plan as defined by 29 USCS § 1002," and that "ERISA, 28 U.S.C. 1132 (a)(1)(B) authorizes the Taylors to recover benefits due under the terms of the plan." [Id., ¶¶ 42-47.] The Taylor Agreement contained a number of retirement benefits, in addition to monetary compensation, such as health care and long term care for both Dr. Taylor and Mrs. Dinah Taylor. [Id., ¶¶ 46.] The Plaintiffs also state that promissory estoppel should result in the agreement being enforced because their detrimental reliance on the agreement "should reasonably have been expected to induce action or forbearance," by the Plaintiffs. [Id., ¶¶ 22-23.]
The Plaintiffs allege, in addition to the contract and common law damages, that the University representatives have engaged in slander as they made false statements that have beenpublished to third parties. [R. 16, ¶ 26.] The amended complaint alleges that these false statements suggest that Dr. Taylor "hid the Taylor agreement from the University and from the Board of Trustees, and that he had the contract drawn up in a deceitful or scheming manner." [Id.] Dr. Taylor and Mrs. Taylor believe that these statements were made by the University with reckless disregard for the truth or knowledge of the falsity of the statements, and that Dr. Taylor was harmed by their publication. Since these statements "includ[e] allegations of underhanded or dishonest actions by Dr. Taylor, [they] are actionable as slander per se." [Id., ¶ 28.]
The amended complaint also presents claims under intentional infliction of emotional distress. Both Dr. and Mrs. Taylor were harmed when the University used "economic coercion against an elderly couple, including threats of the loss of their residence and health insurance, as well as their income, in an effort to accomplish a breach of a longstanding and enforceable contract." [Id., ¶ 33.] Plaintiffs allege that the discontinuance of retirement benefits has in fact caused severe emotional distress as the elderly couple has been forced to decide where to live, how to pay for healthcare and related costs, where to obtain insurance, and how to meet remaining financial obligations. [Id., ¶ 35.] Dr. Taylor and Mrs. Taylor seek punitive damages and allege that the University has acted "with malice and oppression, and the conduct of the University was at all times of a willful and wanton character." [Id., ¶ 38.]
Dr. and Mrs. Taylor also claim that, due to the Board of Trustee's vote which continued Mrs. Taylor's salary as of Dr. Taylor's retirement, the Taylor Agreement should "be reformed to correct the mutual mistake and to comport with the true intent of the parties." [R. 16, ¶ 41.] Last, the Plaintiffs allege that the University has benefited from unjust enrichment. Dr. Taylor, in reliance of the Taylor Agreement, continued to work as President for an additional two years after that agreement was signed. [Id., ¶ 49.] During this time he raised significant amounts ofmoney for the University from donors and trained the next President that had been selected by the Board of Trustees. [Id.] While training his replacement, Dr. Taylor facilitated introductions so that the incoming President could meet University donors so as to "encourage donations to the University in the future." [Id., ¶ 50.] Dr. Taylor states that, if not for his reliance on the Taylor agreement, he would not have performed these...
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