Tuesday, May 18, 2021
Czigany Beck sued Manhattan College, alleging breach of contract, conversion, unjust enrichment, and consumer protection claims. In a recent opinion, the Southern District of New York dismissed all of Beck's claims except for her claim for a tuition refund based on unjust enrichment.
The story is familiar. Ms. Beck enrolled in college for the Spring semester, 2020. In March, the school "moved all classes online, cancelled all on-campus events, closed most campus facilities, and required most students living on campus to vacate the residence halls." Plaintiff brought two breach of contract claims, relating to tuition and fees respectively, alleging that the College had promised her an in-person learning experience. The court found the representations in the College's brochures and website to be not specific enough to constitute promises.
However, the court found that Ms. Beck's unjust enrichment claim was not duplicative of her breach of contract claim. She alleged that the College had reduced costs and increased government funding as a result of the pandemic. As a result, the court refused to dismiss Ms. Beck's unjust enrichment claim as it related to tuition. Her unjust enrichment claim relating to fees was dismissed, as the court found it barred by a contractual term relating to fees that barred refunds for fee payments.
This part of the decision is extremely odd. The College no doubt has rules regarding tuition refunds that are incorporated into its agreements with its students every bit as much as the "no refund" policy relating to fees. No doubt, students are on notice, for example, that they cannot get a tuition refund if they fail to withdraw before a certain date. Following the court's logic with respect to fees, such terms would bar recovery on the plaintiff's unjust enrichment claim with respect to tuition.
With respect to fees, the student was charged fees in connection with activities (e.g., student organizations) and institutions (the student health center) that were no longer available due to the closure of the campus. If the College failed to provide these services for which the student paid, it either breached its contract or it was unjustly enriched or both. It can't be neither. One party cannot breach its contractual obligations and then say, "Sorry, no refunds." That can't be the law.