Court Opinion

ID: 4394746
Source: CourtListenerOpinion
Date Created: 2019-05-08 09:05:30.818036+00
Date Added: 2024-06-11T14:52:04.656355
License: Public Domain

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
                 revision until final publication in the Michigan Appeals Reports.

                          STATE OF MICHIGAN

                            COURT OF APPEALS

NICHOLE ROLFE,                                                       UNPUBLISHED
                                                                     May 7, 2019
               Plaintiff-Appellant,

v                                                                    No. 340158
                                                                     Genesee Circuit Court
BAKER COLLEGE,                                                       LC No. 15-104587-CK

               Defendant-Appellee.

Before: BOONSTRA, P.J., and METER and FORT HOOD, JJ.

PER CURIAM.

       Plaintiff appeals the consent judgment entered by the trial court to the extent it limited
her recoverable damages. We affirm.

                   I. PERTINENT FACTS AND PROCEDURAL HISTORY

        Plaintiff was enrolled in defendant’s nursing program. Approximately six months into
her tenure as a student in defendant’s program, plaintiff was subjected to discipline from
defendant’s nursing director. As part of that discipline, plaintiff signed a “behavior contract”
that would permit her dismissal from defendant’s program if she continued to demonstrate
“improper professional behavior.” Plaintiff was subsequently discharged from the program for
violation of the behavior contract based on conduct that defendant characterized as “[d]isrupting
the learning environment . . . by continuously arguing . . . about a personal belief regarding
immunizations,” “persistent, aggressive, oppositional behavior . . . by student in clinical group
setting . . . disrupting the clinical learning environment,” and “abrasive and unprofessional”
email communications to an instructor.

       Plaintiff filed suit, asserting breach of express or implied contract claims. In response to
defendant’s motion for summary disposition, plaintiff asserted that her damages included “future
lost wages” based on the full wages of a professional midwife for 30 years, in the amount of
$97,700 per year for 30 years; plaintiff calculated her total damages at over three million dollars.
Defendant filed motions in limine seeking to restrict plaintiff’s damages to the cost of the tuition
she had paid to defendant, which according to defendant was at most $9,270.85. After several
motion hearings, the trial court granted summary disposition in favor of defendant on most of

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plaintiff’s claims, including her claim for breach of “the covenant of good faith and fair
dealing,”1 but denied summary disposition regarding plaintiff’s claim for breach of the behavior
contract. The trial court also issued an opinion and order limiting plaintiff’s recoverable
damages to “the cost of education,” thereby excluding such other claimed damages as future lost
wages, stating in relevant part:

       Plaintiff may recover, if and when proven, the costs of her education in a sense
       broader than tuition and books but limited to what she actually paid. If she paid
       with borrowed funds, such funds are a measure of damages, so long as she is
       obligated to pay them back. To the extent she is not required to pay them back
       but she is precluded from obtaining additional funds (e.g. a one-time grant) her
       inability to reacquire funds to pay for an education elsewhere formulates an aspect
       of her damages.

       Before trial, the parties stipulated to the entry of a final judgment in favor of plaintiff and
against defendant with regard to plaintiff’s claim that defendant had breached the behavior
contract, and to the dismissal of plaintiff’s other claims, with a stipulated damages amount of
$15,000 plus a waiver of any remaining debt owed by plaintiff to defendant. The consent
judgment reserved plaintiff’s right to appeal the trial court’s limitation of her damages.

       This appeal followed.

                                II. LIMITATION ON DAMAGES

       Plaintiff argues that the trial court erred by restricting her damages to the costs of her
nursing school education. We disagree. The trial court’s pre-judgment orders limiting plaintiff’s
damages were made in the context of a partial grant of summary disposition under
MCR 2.116(C)(10), as well as the trial court’s partial grant of defendant’s motions in limine
requesting limitation of damages.

       A motion for summary disposition under MCR 2.116(C)(10) tests the factual
       sufficiency of the complaint. In reviewing a grant of summary disposition under
       MCR 2.116(C)(10), this Court considers the pleadings, admissions, and other
       evidence submitted by the parties in the light most favorable to the nonmoving
       party. Summary disposition is appropriate if there is no genuine issue of material
       fact and the moving party is entitled to judgment as a matter of law. [Kendzierski
       v Macomb Co, 319 Mich. App. 278, 282; 901 NW2d 111 (2017) (citation
       omitted).]

1
  Plaintiff refers to this covenant as one of “good faith and honest dealing.” We use the phrasing
typically used by courts in addressing this covenant. See, e.g., Fodale v Waste Mgt of Mich, Inc,
271 Mich. App. 11, 35; 718 NW2d 827 (2006); Ulrich v Fed Land Bank of St Paul, 192 Mich. App.
194, 197; 480 NW2d 910 (1991); Dahlman v Oakland Univ, 172 Mich. App. 502, 507; 432 NW2d
304 (1988).

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This Court reviews for an abuse of discretion a trial court’s decision to grant or deny a motion in
limine. Bartlett v Sinai Hosp of Detroit, 149 Mich. App. 412, 418; 385 NW2d 801 (1986). A trial
court is found to have abused its discretion when its decision falls outside the range of reasonable
and principled outcomes. Maldonado v Ford Motor Co, 476 Mich. 372, 388; 719 NW2d 809
(2006).

        Plaintiff argues that the trial court erred by denying her the ability to recover damages for
lost future wages and other damages not directly tied to the expense of her nursing education,
including the expense of her pre-nursing program education. Plaintiff urges this Court to accept
the reasoning of a Florida court in allowing an award of damages for breach of contract to reflect
the loss of future educational, professional and wage earning opportunities. See Sharick v
Southeastern Univ of Health Sciences, Inc, 780 So2d 136, 138 (Fla App, 2000) (Sharick I); Nova
Southeastern Univ of the Health Sciences, Inc v Sharick (Following Remand), 21 So3d 41 (Fla
App, 2009) (Sharick II). Plaintiff contends that she sufficiently demonstrated the likelihood of
her successful completion of defendant’s nursing program and of her progressing to higher
educational achievements and professional employment, and that she established with reasonable
certainty her claimed financial losses. We hold that the damages plaintiff seeks are not
recoverable under Michigan law regarding breach of contract damages.

       As recognized by this Court:

       Damages are an element of a breach-of-contract claim. “The party asserting a
       breach of contract has the burden of proving its damages with reasonable
       certainty, and may recover only those damages that are the direct, natural, and
       proximate result of the breach.” “[D]amages must not be conjectural or
       speculative in their nature, or dependent upon the chances of business or other
       contingencies. . . .” Although breach-of-contract damages need not be precisely
       established, “uncertainty as to the fact of the amount of damage caused by the
       breach of contract is fatal[.]” [Van Buren Charter Twp v Visteon Corp, 319 Mich
       App 538, 550-551; 904 NW2d 192 (2017), oral argument on the application gtd
       501 Mich. 1069 (2018) (citations omitted).]

Damages are speculative when “they do not arise from [a] purported breach of contract but
depend entirely on the occurrence of multiple contingencies which might or might not occur at
some point in the future.” Id. at 553 (citation omitted). It is routinely recognized that “a
plaintiff’s remedy for breach of contract is limited to damages that arise naturally from the
breach or those that were in the contemplation of the parties at the time the contract was made.”
See, e.g., Allison v AEW Capital Mgt, LLP, 481 Mich. 419, 426 n 3; 751 NW2d 8 (2008)
(emphasis added). The intended purpose underlying these concepts is to “place the nonbreaching
party in as good a position as if the contract had been fully performed.” Id. (citation omitted).

        Plaintiff’s argument appears to blur the lines between the damages compensable in a tort
action and those for breach of contract. “A plaintiff cannot maintain an action in tort for
nonperformance of a contract. There must be a separate and distinct duty imposed by law. An
alleged bad-faith breach of a[] . . . contract does not state an independent tort claim.” Casey v
Auto Owners Ins Co, 273 Mich. App. 388, 401-402; 729 NW2d 277 (2006) (citations omitted).
Plaintiff’s complaint and amended complaint are very clear – all of her claims were identified

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solely as various permutations of a breach of contract claim. 2 The claim that survived in the trial
court, in the final order, was plaintiff’s claim for breach of the behavior contract. Thus,
plaintiff’s damages are restricted to the type of claim pleaded – breach of an express contract.
This Court has recognized, in the employment context, a distinction between tort and breach of
contract damages with regard to the availability of “future lost wages.” Hord v Environmental
Research Institute of Mich, 228 Mich. App. 638, 643-644; 579 NW2d 133 (1998), remanded by
459 Mich. 960 (1999), rev’d on other grounds after remand 463 Mich. 399 (2000).

        In this case, defendant’s liability relates to a breach of the behavior contract. This
contract related specifically to plaintiff’s conduct following her enrollment in defendant’s
nursing program, bore a date of June 10, 2013, after plaintiff’s acceptance into the program, and
was to remain in effect for the “Duration of the Nursing Program.” It also delineated that the
failure of plaintiff to abide by the terms of the behavior contract could lead to “failure of the
current courses” or “dismissal from the Baker College Nursing Program.” It is difficult to
construe how plaintiff’s pre-nursing program academics or the failure to pursue her alleged later
desired educational or professional pursuits comprise “damages that are the direct, natural and
proximate result of the breach,” Van Buren Charter Twp, 319 Mich. at 550-551, or how these
alleged past and future damages “were in the contemplation of the parties at the time the contract
was made,” Allison, 481 Mich. at 426 n 3. The behavior contract arose solely in the context of
plaintiff’s current academic pursuit and had a definitive duration. There is no indication that the
parties to the contract considered her anticipated future academic and professional career and
earning capacity. Instead, the behavior contract is unambiguous in regard to the parameters it
encompasses – plaintiff’s involvement in defendant’s specific nursing program.

        Further, unlike tort cases where damages may address a loss of future earning capacity,
plaintiff has not suffered a permanent injury or debilitation that prevents her from earning a
living, or even from earning a living as a midwife, provided she completes her education and
licensure at another school. Loss of earning capacity is typically addressed through tort liability.
Nawrocki v Hawkeye Security Ins Co, 83 Mich. App. 135, 140; 268 NW2d 317 (1978 (citation
omitted).

       Plaintiff’s argument also runs afoul of a basic principle of contract damages – mitigation.
“Mitigation of damages is a legal doctrine that seeks to minimize the economic harm arising
from wrongdoing.” Morris v Clawson Tank Co, 459 Mich. 256, 263; 587 NW2d 253 (1998).
Specifically:

       Where one person has committed a tort, breach of contract, or other legal wrong
       against another, it is incumbent upon the latter to use such means as are
       reasonable under the circumstances to avoid or minimize the damages. The
       person wronged cannot recover for any item of damage which could thus have
       been avoided. [Id. (citation omitted).]

2
 The possible exception is plaintiff’s claim for breach of the covenant of good faith and fair
dealing. We address that count later in this opinion.

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Further:

       In the context of a breach of an employment contract, wrongful discharge, or
       discriminatory firing, mitigation of damages obligates the victim of the
       wrongdoing to make reasonable efforts to find employment after discharge. The
       plaintiff’s back-pay award, if he succeeds at trial, is then reduced by the amount
       that he earned in mitigation. Such a plaintiff may not purposefully remain
       unemployed or underemployed in order to maximize recoverable damages in the
       form of lost wages. [Id. at 264 (citation omitted).]

        Plaintiff testified at her deposition that her efforts to pursue her nursing education after
her dismissal from defendant’s nursing program consisted of phone calls to the nursing
department at Lansing Community College that led her to understand that her dismissal from
defendant’s program would preclude her admission at Lansing Community College. Plaintiff
could not identify the individual she spoke with by telephone and did not receive or provide any
verification of the content of the conversation that transpired. She had taken no further steps to
secure admission to an alternative nursing program, asserting, “If one says no, I assume all of
them would say no.” In addition, plaintiff has not attempted to secure other employment. “In
both contract and tort actions, an injured party must make every reasonable effort to minimize
damages[.]” Comerica Bank v Cohen, 291 Mich. App. 40, 50; 805 NW2d 544 (2010). Plaintiff
has failed to expend minimal efforts, let alone reasonable efforts, to mitigate her purported
damages.

       Notwithstanding the above, plaintiff argues that the relationship between a student and an
academic institution is an implied contract that supports the type of damages she claims. In
support, plaintiff cites Booker v Grand Rapids Med College, 156 Mich. 95, 99-100; 120 N.W. 589
(1909), in which our Supreme Court stated:

       [W]hen one is admitted to a college, there is an implied understanding that he
       shall not be arbitrarily dismissed therefrom. The required fees may be paid
       annually, and may be no more than fair fees for the advantages received by the
       student during the year, and yet it is clear that the fees for the first year are, in
       fact, paid and received with the understanding that the work of the year will not
       be made fruitless, a graduation and a degree made impossible, by an arbitrary
       refusal to permit further attendance. In this understanding there is no want of
       mutuality. There is no want of good and valuable consideration. There is written
       evidence of it in the articles of association and the prospectuses of respondent and
       in the rolls of the college in which relators’s names are entered as matriculates.
       There is no good reason why the law should not recognize, as growing out of
       these relations, a right of relators resting in contract to be continued as students by
       the respondent.

        We note that in Booker the Court was dealing with an implied contract and the
obligations that arise after admission to an educational institution, rather than an express
contract. Typically, an implied contract will not be found “when the subject matter clearly is
governed by express contracts.” Landstar Express America, Inc v Nexteer Auto Corp, 319 Mich
App 192, 201; 900 NW2d 650 (2017). Here, it is the express behavior contract that is at issue

                                                -5-
and not a more generalized implied contract regarding the parties’ respective rights and
obligations. More importantly, even if plaintiff’s claim was based on an implied contract theory,
Booker does not stand for the proposition that an academic institution, in accepting a student,
guarantees that the student will complete the program, receive a degree, receive the relevant
licensure, and maintain full employment at a particular salary for the duration of the student’s
career. Whether based on an express or implied contract, plaintiff’s damages are still restricted
or limited to those that are “the direct, natural, and proximate result of the breach,” Van Buren
Charter Twp, 319 Mich. App. at 550-551, or “that were in the contemplation of the parties at the
time the contract was made,” Allison, 481 Mich. at 426 n 3. Besides presenting a perverse
incentive (for a student who is expelled from an academic program to seek a lifetime of wages
without having to actually complete a degree, obtain a license, interview for an obtain a position,
and actually work) plaintiff’s argument that she is entitled to wage loss damages for the entirety
of her potential professional life is simply too speculative and dependent on a multitude of
contingencies that are uncertain. Van Buren Charter Twp, 319 Mich. App. at 553; see also
Chelsea Investment Group, LLC v Chelsea, 288 Mich. App. 239; 792 NW2d 781 (2010).

       We also decline to adopt plaintiff’s characterization of the Florida District Court of
Appeals’s reasoning in Sharick II, 21 So3d at 42-43. In Sharick II, a medical student (Sharick)
was dismissed from the osteopathic medicine program at the Southeastern University of Health
Sciences, Inc., two months before receipt of his medical degree. A jury awarded Sharick
“$813,000 for earnings lost in the past and $3.5 million (present value) for earnings that he
would lose in the future.” Id. at 42-43. This verdict was upheld on appeal. Id.

       Besides not being binding on this Court, Sharick II is significantly different both factually
and legally from the instant case. First, a jury determined that Sharick’s dismissal from the
medical program mere months before receiving his degree “was arbitrary, capricious, and/or
lacking any discernable rational basis.” Id. at 42 (citation omitted). Second, Sharick was
involved in a multi-year medical program, with his dismissal occurring two months before
completion. Plaintiff was enrolled in an 18 month associate degree nursing program, with her
termination occurring after her completion of approximately one-third of the program. Third, a
jury determined that Sharick “could not obtain a DO degree from another institution[.]” Id. at
43. Here, plaintiff merely asserts, based on one or more phone calls to Lansing Community
College, that she will now never be able to obtain entry to a nursing program anywhere.

         Further, the Florida court recognized that Sharick would be required to mitigate his
damages. Sharick I, 780 So2d at 138 (“we recognize the potential for mitigation of damages if
Sharick fails to establish that it would be impossible for him to obtain a DO degree at another
institution. In that event, the appropriate measure of damages would only be the reproduction
cost of acquiring the degree elsewhere. This would include a calculation of the present value of
his lost income during the time period needed to acquire the degree, coupled with the tuition and
associated costs incurred at the new school.”). In any event, to the extent that Sharick I or II can
be read as supporting the proposition that a student in plaintiff’s position may recover a full
career’s worth of wages from her chosen future career, that proposition is not supported by the
law of Michigan. Plaintiff similarly over-reads a case from the Court of Appeals of Ohio,
Habegger v Owens Community College, 2017-Ohio-8180 (Ohio App, 2017), involving a
school’s loss of accreditation; contrary to plaintiff’s assertion, Habegger confirms that the
damages compensable are only those that are directly attributable to the breach of contract and
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must be established by actual evidence of loss and not mere speculation. We do not in any event
find these decisions from other jurisdictions persuasive of anything in the context of this case.
Hiner v Mojica, 271 Mich. App. 604, 612; 722 NW2d 914 (2006). And to the extent plaintiff
argues that we should adopt her position as a matter of public policy, “such a decision should
come from the Legislature, not the judiciary.” Terrien v Zwit, 467 Mich. 56, 70; 648 NW2d 602
(2002).

                      III. BREACH OF COVENANT OF GOOD FAITH

       Plaintiff argues that the trial court erred by dismissing her claim for breach of a covenant
of good faith and fair dealing. We disagree.

        Plaintiff pleaded this claim as a separate count in her amended complaint. The trial court
rejected plaintiff’s contention that “a cause of action [is] created by any public policy
consideration or breach of good faith covenant.” We agree with the trial court.

        This Court has consistently stated that it declines to “recognize” a breach of an implied
covenant of good faith and fair dealing between parties to a contract as “a cause of action,
because such a radical departure from the common law and Michigan precedent should come
only from the Supreme Court.” Dahlman v Oakland Univ, 172 Mich. App. 502, 507; 432 NW2d
304 (1988). See also Ulrich v Fed Land Bank of St Paul, 192 Mich. App. 194, 197; 480 NW2d
910 (1991) (“Michigan does not recognize an independent tort action for an alleged breach of a
contract’s implied covenant of good faith and fair dealing.”); Fodale v Waste Mgt of Mich, Inc,
271 Mich. App. 11, 35; 718 NW2d 827 (2006) (“Michigan does not recognize a cause of action
for breach of the implied covenant of good faith and fair dealing.”). Thus, premised on
plaintiff’s pleading of this as a separate or independent count within her amended complaint, the
trial court correctly granted summary disposition in favor of defendant on this claim. Plaintiff
does not argue that the trial court incorrectly granted summary disposition on any of her other
breach of contract claims. And to the extent she argues that defendant’s breach of the behavior
contract was based on a breach of an implied covenant of good faith and fair dealing, defendant
has already stipulated to its liability on that claim. Plaintiff’s argument, even if correct, would
make no difference to the availability of the type of damages she claims.

       Affirmed.

                                                            /s/ Mark T. Boonstra
                                                            /s/ Patrick M. Meter
                                                            /s/ Karen M. Fort Hood

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