Villarreal v. Art Institute of Houston Inc.

• Decision Date: 11 May 2000
• Docket Number: No. 13-99-511-CV,13-99-511-CV
• Citation: 20 S.W.3d 792
• Parties: (Tex.App.-Corpus Christi 2000) DANIZA S. VILLARREAL, Appellant, v. ART INSTITUTE OF HOUSTON, INC., Appellee
• Court: Texas Court of Appeals

Page 792

20 S.W.3d 792 (Tex.App.-Corpus Christi 2000)

DANIZA S. VILLARREAL, Appellant, v. ART INSTITUTE OF HOUSTON, INC., Appellee.

No. 13-99-511-CV

COURT OF APPEALS THIRTEENTH DISTRICT OF TEXAS CORPUS CHRISTI

May 11, 2000

On appeal from the 270th District Court of Harris County, Texas. [Copyrighted Material Omitted]

[Copyrighted Material Omitted] Before Chief Justice Seerden and Justices Dorsey and Yanez.

Opinion

DORSEY,Justice.

Daniza Villarreal enrolled in the photography program at the Art Institute of Houston, Inc. ("The Art Institute"). The Art Institute is a technical college which offers various degree programs, but does not offer transferrable college credit courses. Villarreal contends that its representatives made numerous false representations to her regarding the program, the school, and the costs. She took out guaranteed student loans in order to pay for the program. She did not complete the program, and did not repay the loans as required. She sued The Art Institute of Houston, Inc. for fraud and breach of contract.

Her case was tried to a jury. After the close of Villarreal's case, the trial court directed verdict for The Art Institute on the breach of contract claim. The jury found for The Art Institute on the fraud claims, and a take nothing judgment was entered against Villarreal. She appeals this judgment, contending that the trial court erred in directing verdict against her on the contract claims, and that the evidence was legally and factually insufficient to support the jury's finding on the fraud claims.

Breach of Contract

We hold the trial court did not err in directing verdict against Villarreal on her breach of contract claims. Villarreal contends that her contract with The Art Institute was partly written and partly oral, and alleges that The Art Institute breached the contract in three ways:

(1) failing to provide her with unlimited use of its photography department facilities and equipment;

(2) failing to provide her with college credits that could be transferred to another college or university; and

(3) failing to provide her with an associate's degree.

Conversely, The Art Institute contends that its contract with Villarreal--in its entirety--was embodied in one document, the Enrollment Agreement. The Art Institute argues that it did not breach the express terms of that contract, and that parol evidence is not admissible to alter its terms. It appears the trial court granted directed verdict on that basis.

Standard of Review for Directed Verdict

A directed verdict is appropriate when reasonable minds can draw only one conclusion from the evidence. Collora v. Navarro, 574 S.W.2d 65, 68 (Tex. 1978); Villegas v. Griffin Industries, 975 S.W.2d 745, 748 49 (Tex. App.--Corpus Christi 1998, no writ). Where the plaintiff fails to present evidence in support of a fact essential to her right to recover or where a defense against the plaintiff's cause of action is conclusively proved or admitted, a directed verdict for the defendant is proper. Villegas, 975 S.W.2d at 749. On review, we examine the evidence in the light most favorable to the party against whom the verdict was rendered and disregard all contrary evidence and inferences. Qantel Bus. Sys. v. Custom Controls, 761 S.W.2d 302, 303-04 (Tex. 1988); Villegas, 975 S.W.2d at 749. When reasonable minds may differ as to the truth of controlling facts, the issue must go to the jury. Villegas, 975 S.W.2d at 749. When no evidence of probative force on an ultimate fact element exists, or when the probative force of slight testimony is so weak that only a mere surmise or suspicion is raised as to the existence of essential facts, the trial court has the duty to instruct the verdict. Nelson v. American Nat. Bank of Gonzales, 921 S.W.2d 411, 415 (Tex. App.--Corpus Christi 1996, no writ). The reviewing court may affirm a directed verdict even if the trial court's rationale for granting the directed verdict is erroneous, provided it can be supported on another basis. Kelly v. Diocese of Corpus Christi, 832 S.W.2d 88, 90 (Tex. App.--Corpus Christi 1992, writ dism'd w.o.j.).

Applicability of the Parol Evidence Rule

Before deciding the merits of this case, we first address The Art Institute's argument regarding the parol evidence rule. The trial court appears to have granted directed verdict on the theory that the entire agreement between The Art Institute and Villarreal was contained in the Enrollment Agreement, a written document, and that parol evidence was not admissible to alter the terms of the unambiguous contract.

Essentially, the same argument was made in Texas Military College v. Taylor, 275 S.W. 1089, 1091 (Tex. Civ. App.--Beaumont 1925, no writ). In that case, a parent who signed a promissory note to pay the school's tuition contended that the school entered into a special contract with him that was different from the terms contained in the catalogue that his tuition notes would be forgiven if his asthmatic son were unable to complete the semester due to his health. Id. The school argued that its catalogue constituted a binding written contract that could not be questioned by verbal testimony. Id. While the court agreed with that general proposition so long as entrance is had under the terms of the contract, Vidor v. Peacock, 145 S. W. 672, (Tex. Civ. App.--San Antonio 1912); Peirce v. Peacock Military College 220 S. W. 191 (Tex. Civ. App.--San Antonio 1920); Aynesworth v. Peacock Military College, 225 S. W. 866 (Tex. Civ. App.--Amarillo 1920); Peacock Military College v. Hughes, 225 S. W. 221 (Tex. Civ. App.--San Antonio 1920); Peacock Military College v. Scroggins, 223 S. W. 232 (Tex. Civ. App.--San Antonio 1920), it held that the school could also enter into a special verbal contract under which entrance could be had, and in that situation, evidence of the verbal contract would certainly be admissible to show its terms. Id.

We do not believe that the entire agreement between Villarreal and The Art Institute was embodied in the Enrollment Agreement. That document did not purport to contain every binding agreement between Villarreal and The Art Institute. It contained general terms regarding the amount of tuition, the policy for raising tuition, a notice that the student had the right to cancel the transaction prior to the expiration of five days from date of signing, a list of supplies, and other general policies of the school, such as a note that the school reserves the right to cancel enrollment of a student who does not appear to be making satisfactory progress. Notably, the document did not include a clause stating that it embodied all agreements between the parties.

Under the parol evidence rule, extrinsic evidence is ordinarily not admissible to add to, vary, or contradict the terms of a written contract that is clear on its face. National Union Fire Ins. Co. v. CBI Indus., Inc., 907 S.W.2d 517, 521 (Tex. 1995). However, we find that while the promises contained in the enrollment agreement may be clear, it is not clear that those are the only promises between the parties, and the plaintiff testified that they were not. Rather, we find that the entire agreement was made partly through written documents, partly through oral representations, and partly through implicit promises ascertained by the parties actions and surrounding circumstances.

Directed verdict was therefore not appropriate on the grounds that no parol evidence was admissible to vary the terms of the written contract. However, we find that directed verdict was appropriate on grounds that Villarreal did not present any evidence that the contract contained the terms she alleges were breached by The Art Institute. See Kelly, 832 S.W.2d at 90 (directed verdict can be upheld on appeal on different grounds than those upon which the trial court granted directed verdict).

The Nature of a Contract Between a School and its Students

A few Texas courts have addressed the issue of whether a contract exists between a private educational institution and its students. See e.g. Southwell v. University of Incarnate Word, 974 S.W.2d 351, 356 (Tex. App.--San Antonio 1998, pet. denied); Eiland v. Wolf, 764 S.W.2d 827, 838 (Tex. App.--Houston [1st Dist.] 1989, writ denied) (holding that school catalogue was not enforceable contract when it contained express disclaimer that it did not constitute an irrevocable contract between any student and the school); University of Texas Health Science Center at Houston v. Babb, 646 S.W.2d 502, 506 (Tex. App.--Houston [1st Dist.] 1982, no writ) (holding that a university's catalogue constitutes a written contract between the educational institution and the patron, where entrance is had under its terms); Taylor, 275 S.W. at 1090 1919; (holding that a special verbal contract between a school and parent of student may exist in derogation of the written terms of the catalogue, which constitutes a written contract between the educational institution and the patron, when entrance is had under its terms); Vidor, 145 S.W. 672(school catalogue sets forth terms of contract between patrons and school). The First District Court in Houston has stated that "the relationship between a private school and its student has by definition primarily a contractual basis." Eiland, 764 S.W.2d at 837-38. And recently, the San Antonio court stated that "[w]here a private college or university impliedly agrees to provide educational opportunity and confer the appropriate degree in consideration for a student's agreement to successfully complete degree requirements, abide by university guidelines, and pay tuition, a contract exists." Southwell, 974 S.W.2d at 356.

At a minimum, an implied contract existed between Villarreal and The Art Institute that The Art Institute would provide Villarreal an educational opportunity and confer upon her a degree in photography in consideration for her agreement to successfully complete degree requirement, abide by...