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PEREZ-WEBBER v. Intercoast Career Institute

United States District Court, D. Maine

May 23, 2018




         The Court denies an educational institute's motion for summary judgment against the claims of two of its graduates, who allege that the institute failed to provide them with an adequate education, changed the school calendar and the school location, causing them to incur unanticipated expenses and lost income, and refused to provide their school transcripts to others, causing them to lose educational and employment opportunities. The Court concludes that there are genuine issues of material fact that preclude summary judgment. The Court also rejects the educational institute's position that the Plaintiffs' claims do not meet the $75, 000 jurisdictional requirement for diversity jurisdiction.

         I. BACKGROUND

         On April 6, 2016, Maria Perez-Webber and Jossie Reynoso, former students at the Nursing Program at InterCoast Career Institute (InterCoast), filed this civil action claiming that InterCoast failed to provide them the quality of nursing education it advertised. Compl. (ECF No. 1). The Plaintiffs alleged breach of contract, negligent misrepresentation, and fraud. Id. On May 4, 2016, InterCoast moved to dismiss the complaint and for a more definite statement. Def.'s Mot. to Dismiss Compl. and/or Mot. for a Mo[re] Definite Statement (ECF No. 7). On October 31, 2016, the Court denied the motion to dismiss. Order on Mots. to Dismiss and for More Definite Statement (ECF No. 10).

         Following completion of discovery, InterCoast filed a motion for summary judgment on January 22, 2018 together with a statement of undisputed material facts. Def. InterCoast Career Institute's Mot. for Summ. J. (ECF No. 60) (Def.'s Mot.); Def.'s Statement of Undisputed Material Facts in Supp. of Def.'s Mot. for Summ. J. (ECF No. 61) (DSMF). The Plaintiffs filed their opposition on February 22, 2018 with a response to InterCoast's statement of material facts and their own statement of facts. Pls.' Opp'n to Def.'s Mot. for Summ. J. (ECF No. 63) (Pls.' Opp'n); Pls.' Resp. to Def.'s Statement of Material Fact (ECF No. 64) (PRDSMF); Pls.' Statement of Material Facts (ECF No. 65) (PSAMF). On March 8, 2018, InterCoast replied to the Plaintiffs' opposition and to their statement of material facts. Def. InterCoast Career Institute's Mem. in Supp. of Mot. for Summ. J. (ECF No. 66); Def.'s Resp. to Pl.'s Statement of Material Facts (ECF No. 67) (DRPSAMF).


         A court may grant summary judgment under Federal Rule of Civil Procedure 56 if the record demonstrates that “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “A ‘material' fact is a ‘contested fact [that] has the potential to change the outcome of the suit under the governing law if the dispute over it is resolved favorably to the nonmovant, ' and a ‘genuine issue' means that ‘the evidence about the fact is such that a reasonable jury could resolve the point in favor of the nonmoving party.'” McCarthy v. City of Newburyport, 252 Fed.Appx. 328, 332 (1st Cir. 2007) (quoting Navarro v. Pfizer Corp., 261 F.3d 90, 93-94 (1st Cir. 2001)) (internal quotation marks and citation omitted).

         The Court must examine the record evidence “in the light most favorable to [the nonmovant], and [must draw] all reasonable inferences in . . . favor [of the nonmoving party].” Foley v. Town of Randolf, 598 F.3d 1, 5 (1st Cir. 2010). At the same time, courts ignore “conclusory allegations, improbable inferences, and unsupported speculation.” Cortés-Rivera v. Dep't of Corr. & Rehab. of Commonwealth of P.R., 626 F.3d 21, 26 (1st Cir. 2010) (quoting Sullivan v. City of Springfield, 561 F.3d 7, 14 (1st Cir. 2009)).


         InterCoast is a private, for-profit California corporation which previously operated a private, for-profit Vocational Nursing Program in Kittery, Maine, with the first class starting in about May 2011 until May 2015. DSMF ¶ 1; PRDSMF ¶ 1. InterCoast also operated a private, for-profit Vocational Nursing Program in South Portland, Maine from approximately October 2007 to March 2016. Id. Maria Perez-Webber and Jossie Reynoso both attended the Practical Nursing Program commencing on or about May 27, 2014 until they both graduated on or about September 4, 2015. DSMF ¶ 2; PRDSMF ¶ 2. Ms. Perez-Webber and Ms. Reynoso applied to and enrolled at InterCoast based on its representations that its nursing program was an accredited professional work-like atmosphere with mature competent professionals to teach students the skills needed to become nurses. PSAMF ¶ 2; DRPSAMF ¶ 2. In exchange for InterCoast's representations, Mses. Perez-Webber and Reynoso each paid InterCoast $37, 000 in tuition.[2] PSAMF ¶ 3; DRPSAMF ¶ 3.

         Ms. Perez-Webber and Ms. Reynoso began taking classes in 2014 at InterCoast's Kittery location. PSAMF ¶ 1; DRPSMAF ¶ 1. The program consisted of four terms.[3] DSMF ¶ 3; PRDSMF ¶ 3. After the Kittery campus shut down, the Plaintiffs were forced to complete their coursework from the South Portland campus, which was an additional burden to them.[4] DSMF ¶ 4; PRDSMF ¶ 4. InterCoast utterly failed to provide Plaintiffs with the education, training, and facilities that it had advertised and that were required by the State Board of Nursing.[5] PSAMF ¶ 4; DRPSAMF ¶ 4. In fact, the state of Maine Board of Nursing placed InterCoast on probation and eventually revoked its license because the Practical Nursing Program did not meet minimal requirements, a decision that caused InterCoast to close its nursing program in 2016.[6] PSAMF ¶ 5; DRPSAMF ¶ 5.

         Maria Perez-Webber and Jossie Reynoso both signed the same enrollment forms with InterCoast.[7] DSMF ¶ 4; PRDSMF ¶ 4. True and correct copies of the InterCoast enrollment forms signed by both Plaintiffs are attached to the declaration of Geeta Brown, corporate president of InterCoast. DSMF ¶¶ 5-6 (citing Aff. of Geeta A. Brown in Supp. of Def.'s Mot. for Summ. J. Attachs. 1-2 InterCoast Career Institute Enrollment Agreements); PRDSMF ¶¶ 5-6. Both enrollment forms have an estimated completion date of August 14, 2015 for Ms. Perez-Webber and Ms. Reynoso. DSMF ¶ 7; PRDSMF ¶ 7. Each enrollment form contained the following provision:

The School has the right, at its discretion, to make reasonable changes in program content, materials, schedules, sequences of courses in programs, or locations in the interest of improving the student's education, or where deemed necessary due to industry changes, academic scheduling, or professional requirements.

Id.[8] Both Plaintiffs inserted their initials at the bottom of page four of the enrollment forms, a few inches from the paragraph quoted above, and both Plaintiffs signed the enrollment forms on page six.[9] DSMF ¶ 8; PRDSMF ¶ 8.

         During the time the Plaintiffs were attending the Practical Nursing Program, InterCoast decided to give all students a one-week break between terms.[10] DSMF ¶ 9; PRDSMF ¶ 9. In part as a result of the one-week break change, the graduation date for the Plaintiffs was delayed by three weeks.[11] DSMF ¶ 10; PRDSMF ¶ 10.[12]

         Both Plaintiffs initialed an “Enrollment Certification Form.”[13] DSMF ¶ 12; PRDSMF ¶ 12. True and correct copies of the signed and initialed enrollment certification forms for the Plaintiffs are attached to Ms. Brown's declaration.[14] DSMF ¶ 13 (citing Aff. of Geeta A. Brown in Supp. of Def.'s Mot. for Summ. J. Attachs. 3-4 InterCoast Colleges/InterCoast Career Institute Practical Nursing Program Enrollment Certification Forms); PRDSMF ¶ 13. Page two of the enrollment certification form states in part:

I understand that I must satisfactorily complete my course of study, return all library and/or loan textbooks, complete an exit interview, and pay all tuition charges in full to the institution prior to receiving my diploma, certificate, or final transcript.

DSMF ¶ 14; PRDSMF ¶ 14.[15] The Plaintiffs initialed the paragraph of the enrollment certification form containing this statement. The enrollment agreements also state:

In order to graduate, students must:
6. Fulfill all financial obligations to the College prior to graduation unless previous satisfactory arrangements have been made in writing.
7. Attend the exit interview sessions with Student Services, Career Services, and Financial Aid. If satisfactory financial arrangements have not been made, the graduation certificate or diploma will be withheld.

DSMF ¶ 15; PRDSMF ¶ 15.

         After Jossie Reynoso graduated from InterCoast's Practical Nursing Program, she requested that InterCoast forward her transcripts to the State Nursing Board in late 2015 so that she could take the State Nursing Exam, called the NCLEX-PN exam, and InterCoast complied with that request because satisfactory financial arrangements had been made with the institution. DSMF ¶ 16; PRDSMF ¶ 16. Jossie Reynoso passed the NCLEX-PN on her first attempt and received her Practical Nursing License on or about December 17, 2015. DSMF ¶ 17; PRDSMF ¶ 17. Ms. Reynoso planned to begin nursing school in January 2016 to obtain her Registered Nurse's license; however, InterCoast initially refused to release her transcripts, falsely claiming that Ms. Reynoso had an outstanding balance with InterCoast.[16] PSAMF ¶ 6; DRPSAMF ¶ 6. Ms. Reynoso was unable to begin nursing school, and instead she hired Attorney Loranger to obtain her transcripts from InterCoast. Id.

         In January 2016, Attorney Loranger contacted InterCoast's counsel, Neil Evans, to request release of Ms. Reynoso's transcript.[17] PSAMF ¶ 7; DRPSAMF ¶ 7. Attorney Evans, counsel for InterCoast, advised Attorney Loranger that because Ms. Reynoso owed money to Tuitions Options, the organization that InterCoast uses to finance loans, InterCoast would not release any transcripts.[18] PSAMF ¶ 8; DRPSAMF ¶ 8. Ms. Reynoso sent Attorney Evans a copy of her statement from Tuition Options showing that her loan had a zero balance.[19] PSAMF ¶ 9; DRPSAMF ¶ 9. When InterCoast continued to refuse to release the transcript, Ms. Reynoso filed this lawsuit.[20] PSAMF ¶ 10; DRPSAMF ¶ 10.

         After Maria Perez-Webber graduated from InterCoast's Practical Nursing Program, InterCoast did not forward her transcripts to the State Board of Nursing in 2015 despite the fact that Ms. Perez-Webber had met her financial obligations to InterCoast.[21] DSMF ¶ 18; PRDSMF ¶ 18. In April 2016, InterCoast forwarded her transcripts to the State Board of Nursing, and Ms. Perez-Webber took the NCLEX-PN exam shortly thereafter.[22] DSMF ¶ 19; PRDSMF ¶ 19. Ms. Perez-Webber passed the NCLEX-PN exam on her first try and received her Practical Nursing License in or about June 2016. DSMF ¶ 20; PRDSMF ¶ 20.

         In this lawsuit, Geeta Brown, InterCoast's corporate president, submitted an affidavit in which she attests that as of late 2015, Ms. Reynoso had made “satisfactory financial arrangements” with InterCoast.[23] PSAMF ¶ 11; PRDSMF ¶ 11. Other than releasing the transcript to the Nursing Board, InterCoast has not otherwise released Ms. Reynoso's transcript because it contends she still owes it money, and Ms. Reynoso has been unable to apply to a registered nursing program because she cannot provide her transcript.[24] PSAMF ¶ 12; DRPSAMF ¶ 12. If Ms. Reynoso had started nursing school to obtain her RN in January 2016, she likely would have graduated from nursing school and obtained her RN in January 2017 and commenced employment as an RN in March 2017.[25] PSAMF ¶ 13; DRPSAMF ¶ 13. Ms. Reynoso currently earns $29.00 per hour as an LPN, and based on her research, search of employment ads, and discussions with RNs, Ms. Reynoso is aware that the average starting pay for an RN in Massachusetts is $50.00 per hour.[26] PSAMF ¶ 16; DRPSAMF ¶ 16. As an LPN, Ms. Reynoso currently earns $21.00 less per hour than she would if she were an RN.[27] PSAMF ¶ 17; DRPSAMF ¶ 17. Ms. Reynoso often works sixty to seventy hours per week and she therefore loses approximately $1, 300 per week in compensation by not being an RN.[28] PSAMF ¶ 18; DRPSAMF ¶ 18. To date, Ms. Reynoso contends that she has lost approximately $75, 000 due to InterCoast's refusal to provide her with her transcript.[29] PSAMF ¶ 19; DRPSAMF ¶ 19.

         After Term III, InterCoast closed its Kittery campus due to the poor facilities at the Kittery campus and forced the students, including Ms. Perez-Webber, to commute to InterCoast's South Portland location.[30] PSAMF ¶ 20; DRPSAMF ¶ 20. The additional commuting cost Ms. Perez-Webber about $1, 000. Id.

         Ms. Perez-Webber took out loans through InterCoast to finance her education. PSAMF ¶ 21; DRPSAMF ¶ 21. The terms of the loans allowed her up to thirty-six months to repay them.[31] Id. After Ms. Perez-Webber graduated, InterCoast refused to release her transcripts unless she accelerated payment of the remaining balance on her loan with a lump-sum payment of several thousand dollars.[32] PSAMF ¶ 22; DRPSAMF ¶ 22. Ms. Perez-Webber repeatedly requested that InterCoast release her transcripts so that she could take her LPN nursing boards; however, InterCoast refused.[33] PSAMF ¶ 23; DRPSAMF ¶ 23. In April 2016, Ms. Perez-Webber was able to make a lump-sum payment to pay off the balance of her loan.[34] PSAMF ¶ 24; DRPSAMF ¶ 24. Ms. Perez-Webber was able to take her LPN Boards in June of 2016, which she immediately passed.[35] PSAMF ¶ 25; DRPSAMF ¶ 25.

         Ms. Perez-Webber planned to take the LPN Nursing Boards in October 2015.[36]PSAMF ¶ 26; DRPSAMF ¶ 26. At that time, Ms. Perez-Webber was working as a Licensed Nursing Aid (LNA) earning $16.00 per hour. PSAMF ¶ 27; DRPSAMF ¶ 27. If Ms. Perez-Webber had taken the LPN Boards in October 2015, she would have received a raise to $23.00 per hour.[37] PSAMF ¶ 28; DRPSAMF ¶ 28. InterCoast's refusal to release Ms. Perez-Webber's transcripts delayed by eight months her ability to take the LPN Boards and obtain the raise.[38] PSAMF ¶ 29; DRPSAMF ¶ 29. The eight month delay caused Ms. Perez-Webber to lose at least $13, 000 in income.[39]PSAMF ¶ 30; DRPSAMF ¶ 30.[40]


A. InterCoast's Motion

         InterCoast's motion for summary judgment is primarily based on its contention that the contract between the Plaintiffs and InterCoast expressly allows InterCoast to do the exact things about which the Plaintiffs are now complaining, and therefore the Plaintiffs have no ground to complain. Def.'s Mot. at 7-10. In InterCoast's view, to the extent the Plaintiffs complain that InterCoast provided them an inadequate education, their performance on the state LPN Board belies their complaint since both Ms. Perez-Webber and Ms. Reynoso passed the licensing examination the first time they took it. Id. at 8. Although the Plaintiffs complain about the one-week break between terms that InterCoast instituted while they were there, InterCoast insists that the contract allows it to make such adjustments to the academic calendar. Id. Similarly, InterCoast argues that it contractually reserved the right to change locations, here from Kittery to South Portland. Id. Finally, InterCoast says that the contract allows it to withhold transcripts for those students who owe it money and therefore there ...

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