Case Title: Tuomala v. Regent University

Citation: 

Docket Number: 952286

State: virginia

Court: Virginia Supreme Court

Date: 1996-11-01T00:00:00Z

Document:
Present:  Carrico, C.J., Compton, Stephenson, Lacy, Keenan,  
and Koontz, JJ., and Whiting, Senior Justice 
 
JEFFREY C. TUOMALA, ET AL. 
 
v.  Record No. 952286 
OPINION BY JUSTICE BARBARA MILANO KEENAN 
                                       November 1, 1996 
REGENT UNIVERSITY 
 
 
FROM THE CIRCUIT COURT OF THE CITY OF VIRGINIA BEACH 
 
Edward W. Hanson, Jr., Judge 
 
 
The primary issue in this appeal is whether an employer's 
refusal to renew an employment contract under its original terms 
constituted a breach of contract. 
 
Three professors at Regent University (Regent), Jeffrey C. 
Tuomala, Elaine Shouse Waller, and Clifford W. Kelly 
(collectively, the professors), filed declaratory judgment suits 
seeking a determination of rights under their faculty contracts. 
The professors alleged that their contracts entitled them to 
permanent tenured employment at Regent and requested the trial 
court to declare that (1) they were entitled to a renewal of the 
exact terms of their three-year continuing contracts, and (2) 
they could not be dismissed from their positions as tenured 
professors at Regent unless they were in breach of their 
contracts, or unless the schools in which they taught were 
discontinued.  The professors also alleged under an estoppel 
theory that they were entitled to annual renewal of their 
contracts because they had reasonably relied to their detriment 
on tenure policy statements made by Regent's agents.   
 
The suits were consolidated and the trial court heard 
evidence in a seven-day bench trial.  The evidence showed that 
each of the three professors had signed a faculty contract for 
 
 
 
 
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the 1993-94 academic year (faculty contracts).  These contracts 
were signed by the president, the provost, and the dean of the 
respective school in which each professor taught.  
 
The provisions in dispute relate to the interpretation of 
the contract phrase, "three-year continuing contract."  These 
provisions are set forth below. 
The contracts each stated: 
 
This three-year continuing contract is subject to the 
policies and procedures governing such contracts as set 
forth in the [f]aculty [h]andbook effective August 
1992. 
 
The preface to the faculty handbook stated: 
 
 
The [f]aculty [h]andbook contains the major policies 
and procedures that govern the academic affairs and 
some of the administrative affairs of the university.  
Our policies are under continuous review and subject to 
change without notice. 
 
Other handbook provisions stated: 
 
 
Tenure -- Continuing Contract
 
 
Annual Entitlement.  A person who has received an 
appointment under a continuing contract is annually 
entitled to a new contract unless he is found by the 
university to have breached his contract or unless the 
school or academic program in which he is employed has 
been discontinued. 
 
 
* * * 
 
 
Annual Review
 
 
Annually, a faculty member is offered a new contract 
consistent with the above policies and procedures.  It 
supersedes the previous contract which may have a 
remaining term of one or, in some cases, two years.  
The second year, and in some cases the third year, of 
both the provisional and continuing contract are, by 
design, never expected to be binding on the parties 
except under the conditions, as follows:  one or both 
parties choose not to offer or to accept a new 
 
 
 
 
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employment contract.  The second year, and in some 
cases the third year, therefore, are designed to insure 
that the employee is employed for one, or in some 
cases, two or more years so that he can find other work 
without economic hardship.
1
 
Regent adopted a new policy in the 1994-95 academic year, 
under which it offered each of the professors a new contract.  
The contracts did not include the term, "three-year continuing 
contract," but instead provided a "tenured faculty appointment" 
for one year, subject to "tenure review" during the following 
academic year.  The professors did not sign the new contracts 
based on their belief that the new "tenure" policy significantly 
reduced or eliminated their contractual rights as set forth in 
the faculty handbook. 
 
The professors introduced evidence showing that in 1989, 
during the process of securing full accreditation for the Regent 
Law School, Herbert W. Titus, then the Dean of the Law School, 
received a letter from the American Bar Association (ABA) site 
team questioning whether Regent provided tenured contracts to its 
faculty.  Robert G. Slosser, who was then Regent's president, 
submitted a response attempting to clarify Regent's policy.  As 
part of the response, Slosser explained paragraph 6 of the 
faculty handbook by noting that this paragraph 
 
was not written in derogation of the guaranteed annual 
three-year contract, as the explicit proviso to that 
section clearly states.  In other words, this provision 
 
    
1This section of the handbook was referred to throughout 
litigation as "paragraph 6." 
 
 
 
 
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does not allow the University to substitute a decision 
not to offer a new employment contract inconsistent 
with its annual obligation to offer such contract to 
any faculty whose appointment is on a three-year 
continuing contract. 
 
 
The professors also presented evidence that during ABA 
hearings, Titus stated that a "tenured" professor was entitled  
annually to receive a new three-year contract unless he was found 
to be in breach of the contract, or the program in which he 
taught was discontinued.  In addition, in a 1990 response to an 
ABA site team report, Titus referred to Slosser's letter as the 
"authoritative interpretation and written commitment regarding 
the University's tenure system." 
 
M.G. Robertson, Regent's chancellor, testified that Regent's 
Board of Directors always had been opposed to the concept of 
permanent tenured employment.  He stated that the Board was 
unaware of the Slosser letter until late 1993, and that had he 
and the Board known of the representations made to the ABA, they 
"would have shut the law school down." 
 
Robertson also confirmed the policy stated in the faculty 
handbook that the entire power to set university policy is vested 
in the Board.  Robertson stated that the president's function is 
to carry out the Board's broad policy directives within the 
policy guidelines, and that Regent's presidents are not permitted 
to take any unauthorized action. 
 
A former Regent president, David J. Gyertson, testified that 
Regent's administration had opposed the concept of permanent 
 
 
 
 
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tenured employment since the university was founded.  Gyertson 
stated that the continuing contract was structured to provide 
financial security to a faculty member, in the event that Regent 
terminated the contract during its three-year duration.  Adelia 
Robertson, a Board member since Regent's founding, testified that 
the continuing contract was not a guarantee of permanent 
employment, and that Regent had never had a "tenure" system.  
 
Gyertson also testified that Regent's president did not have 
the authority to change the university's "foundational" policies, 
especially those related to the Board's role in setting the terms 
and conditions of employment contracts.  Gyertson stated that his 
job as president was to apply the policies of the Board, and that 
if adjustments were necessary, he was "under mandate to bring 
those changes to the [B]oard." 
 
Professor Kelly stated that he was not aware of the Slosser 
letter before the litigation began.  Although Professor Tuomala 
stated that he had read the Slosser letter, he also testified 
that he began teaching at Regent about two years before the 
letter was written.  The record is silent regarding Professor 
Waller's knowledge of the letter. 
 
 Professor Kelly stated that he could not remember whether, 
during his initial employment interview, the Dean of the College 
of Communications and the Arts had represented the university's 
employment policy as "continuing" or "tenured."  Professor 
Tuomala did not recall the exact words used in his interview, but 
 
 
 
 
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said that he came away with an understanding that Regent had 
"some sort" of tenure.  Finally, Professor Waller testified that 
when she raised the issue with the Dean of the College of 
Communication and the Arts, he stated that the continuing 
contract was essentially a "tenure contract" and that she would 
be "secure."  The professors all left other employment positions 
to work at Regent. 
 
Relying in part on the testimony presented, the trial court 
ruled that the contracts did not provide permanent tenured 
employment, but merely afforded financial security to a professor 
who might no longer be acceptable to the university, or who might 
wish to terminate his employment with the university.  The court 
ruled that Regent was bound to honor the remaining two years of 
the three-year faculty contracts, but that Regent was not under 
any obligation to renew the contracts under identical terms.  
Finally, the court ruled that the tenure policy statements made 
to the ABA were at variance with Regent's policy, and that these 
representations were made without knowledge or authorization by 
the Board, which "makes the policy." 
 
On appeal, the professors primarily argue that the trial 
court disregarded the unambiguous language of the faculty 
contracts which promised annual renewal, absent breach of 
contract by the professors.  The professors also advance an 
alternative argument that, even if the contract language is 
ambiguous, the trial court erred in admitting certain parol 
 
 
 
 
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evidence.  We disagree with both contentions. 
 
We first address the issue whether the contract language is 
ambiguous.  The question whether a writing is ambiguous is one of 
law, not of fact.  Langman v. Alumni Ass'n of the Univ. of 
Virginia, 247 Va. 491, 498, 442 S.E.2d 669, 674 (1994); Wilson v. 
Holyfield, 227 Va. 184, 187, 313 S.E.2d 396, 398 (1984).  Thus, 
we are not bound by the trial court's conclusions on this issue, 
and we are permitted the same opportunity as the trial court to 
consider the contract provisions.  Langman, 247 Va. at 498, 442 
S.E.2d at 674; Wilson, 227 Va. at 187-88, 313 S.E.2d at 398. 
 
We hold that the language of the faculty contracts is 
ambiguous.  "An ambiguity exists when language admits of being 
understood in more than one way or refers to two or more things 
at the same time."  Amos v. Coffey, 228 Va. 88, 92, 320 S.E.2d 
335, 337 (1984) (quoting Renner Plumbing v. Renner, 225 Va. 508, 
515, 303 S.E.2d 894, 898 (1983)). 
 
The faculty contracts specify that the professors were 
entitled to a "three-year continuing contract," as explained in 
the faculty handbook.  However, the handbook states only that a 
professor receiving an appointment under a continuing contract is 
entitled annually to a "new contract," rather than renewal of the 
professor's existing contract.  From our reading of these 
provisions, it is unclear whether the faculty contracts entitle 
the professors to renewal of identical three-year continuing 
contracts, or whether the contracts annually entitle them to new, 
 
 
 
 
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but potentially different, contracts. 
 
Having found that the contract language is ambiguous, we 
next consider the trial court's admission of certain parol 
evidence, as well as its factual findings.  When the language of 
a contract is ambiguous, parol evidence is admissible, not to 
contradict or vary contract terms, but to establish the real 
contract between the parties.  Reed v. Dent, 194 Va. 156, 163, 72 
S.E.2d 255, 259 (1952).  The construction of an ambiguous 
contract is a matter submitted to the trier of fact, who must 
examine the extrinsic evidence to determine the intention of the 
parties.  Cascades North Venture Ltd. Partnership v. PRC Inc., 
249 Va. 574, 579, 457 S.E.2d 370, 373 (1995); see Greater 
Richmond Civic Recreation, Inc. v. A. H. Ewing's Sons, Inc., 200 
Va. 593, 596, 106 S.E.2d 595, 597 (1959). 
 
We hold that the trial court did not err in considering 
evidence from present and former Regent Board members regarding 
the Board's intent as expressed in the faculty contracts.  The 
Board is Regent's policy making body and was a party to the 
contracts.  Thus, the trial court was entitled to give the Board 
members' testimony great weight in determining the Board's 
intention.  See Am. Realty Trust v. Chase Manhattan Bank, 222 Va. 
392, 403, 281 S.E.2d 825, 831 (1981). 
 
We review the evidence in the light most favorable to 
Regent, the prevailing party at trial.  RF&P Corp. v. Little, 247 
Va. 309, 319, 440 S.E.2d 908, 915 (1994); Ravenwood Towers, Inc. 
 
 
 
 
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v. Woodyard, 244 Va. 51, 57, 419 S.E.2d 627, 630 (1992).  Since 
the trial court heard the evidence ore tenus, its findings based 
on an evaluation of the testimony are entitled to the same weight 
as a jury's verdict.  RF&P Corp., 247 Va. at 319, 440 S.E.2d at 
915.  Thus, the trial court's decision will be upheld unless it 
appears from the evidence that the judgment is plainly wrong or 
unsupported by the evidence.  Code § 8.01-680; Langman, 247 Va. 
at 498, 442 S.E.2d at 674. 
 
The evidence showed that only the Board has the authority to 
set Regent's policy.  M.G. Robertson, Adelia Robertson, and 
Gyertson all testified that the Board had opposed the concept of 
permanent tenured employment throughout Regent's history and had 
been unaware until late 1993 that any Regent employee had made 
contrary representations concerning Regent's policy.  In 
addition, the professors themselves did not state that they were 
told that the faculty contracts offered permanent tenured 
positions.  Thus, the trial court's ruling that the faculty 
contracts did not provide permanent tenured employment is 
supported by the evidence.
2
 
Next, we find no merit in the professors' argument that 
                     
    
2Since the trial court's ruling is supported by the evidence 
without resort to the language of the handbook preface, we need 
not consider the court's preliminary ruling that the contracts 
incorporated this language. 
 
 
 
 
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Regent was bound, under agency principles, by the tenure policy 
representations made by Regent administrators.  As stated above, 
the record does not show that the professors were offered 
permanent tenured positions when they negotiated their faculty 
contracts.  Further, since the professors did not testify that 
they relied on Slosser's or Titus's statements in entering into 
their faculty contracts, those statements did not bind Regent 
with respect to the professors' claims. 
 
We also find no merit in the professors' other claims, which 
are based on theories of equitable and promissory estoppel.  To 
establish a claim of equitable estoppel, without proving fraud, 
the complainant must show that he reasonably relied on the 
representations and conduct of the defendant, such that he 
changed his position to his detriment.  Stewart v. Lady, 251 Va. 
106, 113, 465 S.E.2d 782, 785 (1996); T . . . v. T . . ., 216 Va. 
867, 872-73, 224 S.E.2d 148, 152 (1976). 
 
The doctrine of equitable estoppel is not available unless 
the party advancing the claim can show that he has acted in 
reliance upon an action or statement of the party he seeks to 
bind.  Khoury v. Community Memorial Hosp., Inc., 203 Va. 236, 
243, 123 S.E.2d 533, 538 (1962).  As stated above, the 
professors' own testimony showed that they were not promised 
permanent tenured employment by Regent administrators, and that 
they did not act in reliance on Slosser's or Titus's 
representations. 
 
 
 
 
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Turning to the claim of promissory estoppel, we first note 
that we have not applied the doctrine in this Commonwealth.  
Stone Printing and Mfg. Co. v. Dogan, 234 Va. 163, 165, 360 
S.E.2d 210, 211 (1987).  Moreover, promissory estoppel is an 
equitable doctrine which generally is used to imply a contract 
where none exists.  Dickens v. Quincy College Corp., 615 N.E.2d 
381, 386 (Ill. App. Ct. 1993).  Thus, the doctrine would not 
apply here because the parties made an enforceable contract. 
 
For these reasons, we will affirm the trial court's 
judgment. 
 
Affirmed.