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Avalos v. The Board of Regents of New Mexico State University

Court of Appeals of New Mexico

July 26, 2017

AMY AVALOS, CHELSIE CARTER, SHELBY HUGHES, MARCELLA MADRID, MARGARITA MELENDEZ, FRANCINE SIMMS, JEAN SMITH, and ANGELA CAVENDER, on behalf of themselves and all others similarly situated, Plaintiffs-Appellees,

         APPEAL FROM THE DISTRICT COURT OF DOÑA ANA COUNTY Jerry H. Ritter Jr., District Judge

          Treinen Law Office PC, Rob Treinen Albuquerque, NM, Almanzar & Youngers PA, Joleen K. Youngers, Las Cruces, NM, The Pickett Law Firm LLC, Lawrence M. Pickett, Las Cruces, NM for Appellees

          Miller Stratvert P.A. Cody R. Rogers Luke A. Salganek Las Cruces, NM for Appellant


          JONATHAN B. SUTIN, Judge

         {1} Plaintiffs are a group of former students who were enrolled in Doña Ana Community College's associate's degree nursing program (the program) in 2012. When Plaintiffs enrolled in the program, written documents provided by the Doña Ana Community College stated that the program was nationally accredited by, among others, the National League of Nursing Accrediting Commission (the Commission). Before the students completed their studies, the Doña Ana Community College lost its Commission accreditation and Plaintiffs sued. They brought an action that included a claim for breach of contract against the Board of Regents of New Mexico State University in its capacity as the body politic for the university and Doña Ana Community College (collectively, Defendant).[1] Defendant sought summary judgment as to Plaintiffs' breach of contract claim, arguing that it was immune under NMSA 1978, Section 37-1-23(A) (1976), because Plaintiffs' claim was not based on a "valid written contract." The district court denied Defendant's motion for summary judgment, Defendant filed a petition for writ of error, and this Court granted the petition to review Defendant's immunity claim. See Handmaker v. Henney, 1999-NMSC-043, ¶¶ 14-15, 128 N.M. 328, 992 P.2d 879 (stating that determinations of immunity under Section 37-1-23(A) can, in general, be reviewed by writ of error). We hold that the written documents regarding accreditation relied upon by Plaintiffs do not constitute a valid written contract under Section 37-1-23(A).


         {2} Plaintiffs' breach of contract claim alleged that "[a] written agreement existed between Plaintiffs . . . and [Defendant] . . . whereby [Defendant] agreed that it would provide a nationally accredited education in nursing in exchange for [Plaintiffs'] enrollment and tuition." Plaintiffs asserted that they entered into a valid written contract with Defendant for a nationally accredited nursing program as evidenced by (1) the offer letter that they received from Defendant that offered admission to the program and required a written response accepting or declining a position in the program; (2) a student handbook that included a statement that information about accreditation of the program could be obtained from the Commission and included a ledger that stated, in relevant part, that the program was accredited by the Commission; and (3) a student handbook acknowledgment form that Plaintiffs were required to sign.

         {3} Section 37-1-23(A) states that "[g]overnmental entities are granted immunity from actions based on contract, except actions based on a valid written contract." Underlying the Section 37-1-23(A) grant of immunity is an overarching policy to "protect the public purse" by requiring that "parties seeking recovery from the state for benefits conferred on it have valid written contracts[.]" Hydro Conduit Corp. v. Kemble, 1990-NMSC-061, ¶ 23, 110 N.M. 173, 793 P.2d 855 (internal quotation marks omitted). This Court has determined that "[b]y limiting lawsuits to valid written contracts, the [L]egislature placed the risk of loss on a party who transacts business with a governmental entity without a valid written contract." Campos de Suenos, Ltd. v. Cty. of Bernalillo, 2001-NMCA-043, ¶ 14, 130 N.M. 563, 28 P.3d 1104. Our standard of review is de novo. See Univ. of N.M. Police Officer's Ass'n v. Univ. of N.M., 2005-NMSC-030, ¶ 8, 138 N.M. 360, 120 P.3d 442; see also Ruegsegger v. Bd. of Regents of W. N.M. Univ., 2007-NMCA-030, ¶ 22, 141 N.M. 306, 154 P.3d 681 ("We apply a de novo review to the application of Section 37-1-23(A) to the facts[.]").

         {4} The parties discuss several cases in which our appellate courts have considered the application of Section 37-1-23(A). We discuss these cases for legal background relating to the issue at hand.

         {5} In Garcia v. Middle Rio Grande Conservancy District, 1996-NMSC-029, 121 N.M. 728, 918 P.2d 7, our Supreme Court considered whether a personnel policy that set forth "certain rights, expectations, obligations, and other promises between the [employer] and its employees" constituted a valid written contract such that the plaintiffs governmental employer could be held liable for breach of an employment contract. Id. ¶¶ 1, 3. The plaintiff sued for breach of an employment contract after he was demoted, which resulted in a reduction in pay. Id. ¶¶ 1-2. In analyzing the case, our Supreme Court first noted that although an employment contract for an indefinite period of time is terminable at will, New Mexico recognizes implied contracts as an exception to the at-will rule. Id. ¶ 10. The Court determined that the employer's personnel policy contained "provisions relating to most every aspect of an employment relationship, including job description, compensation (including salary on promotion, demotion, or transfer), overtime, compensatory time, time clock violations, tardiness, sick leave and annual leave, and holidays." Id. ¶ 12. And the Court recognized that the policy was part of an implied employment contract because "it controlled the employer-employee relationship and [the plaintiff] could reasonably expect [the] employer to conform to the procedures it outline[d]." Id. ¶¶ 11-13 (internal quotation marks and citation omitted). The Court then held that, under the particular facts of Garcia, the implied employment contract, which was based on terms set forth in a personnel policy, constituted a "valid written contract[, ]" and thus immunity was waived for such claims under Section 37-1-23(A). Garcia, 1996-NMSC-029, ¶¶ 14, 20 (internal quotation marks omitted).

         {6} In Espinoza v. Town of Taos, 1995-NMSC-070, ¶ 1, 120 N.M. 680, 905 P.2d 718, the plaintiffs sued the defendant for breach of contract after the plaintiffs' child was injured at the defendant's day camp. Our Supreme Court considered whether the breach of contract claim based on the plaintiffs' written application to the day camp was a valid written contract that waived governmental immunity under Section 37-1-23(A). Espinoza, 1995-NMSC-070, ¶¶ 1, 15. Ultimately, the Court rejected the claim, stating that the town "did not undertake a contractual obligation for liability in the event of injury to a child attending its . . . day camp[, ]" and "[a]t most, the terms of the application merely ensured that space would be provided in the day camp program for children who registered and paid the applicable fee." Id. ¶ 15.

         {7} In Ruegsegger, 2007-NMCA-030, ¶¶ 4, 17, 21-22, this Court considered whether athletic scholarship agreements and a student handbook created a valid written contract under Section 37-1-23(A) between the defendants and the plaintiff. In Ruegsegger, the plaintiff filed a breach of contract claim against the defendants after she was allegedly raped by two school-affiliated athletes. 2007-NMCA-030, ¶ 2. According to the plaintiff, the defendants "breached their contractual obligations by deliberately failing to follow . . . policies and procedures in investigating the sexual attack, failing to provide a school free from harassment and hostility, and failing to provide reasonable support for [the plaintiff] following the assault." Id. The plaintiff was a student athlete and claimed that her athletic scholarship agreements constituted an enforceable, written contract and that she had an implied contract based on the student handbook. Id. ¶ 4. Specifically, the plaintiff highlighted the defendants' failure to assemble a crisis intervention team as required by the student handbook and alleged that the defendants subjected the plaintiff "to humiliation and unfair treatment by deliberately failing to follow . . . policies and procedures after the rape" and failed to "provide reasonable support following the assault." Id. ¶ 14 (internal quotation marks omitted).

         {8} In Ruegsegger, this Court first analyzed the scholarship agreements and held that the scholarship agreements required the plaintiff to maintain acceptable academic performance, play basketball, and comply with university regulations, and in exchange, the university was obligated to provide the plaintiff with scholarship assistance for her education. Id. ¶ 19. According to this Court, the scholarship agreements made "no reference to any duty on the part of [the university] to comply with any . . . regulations or to investigate claims of harassment, sexual assaults, or any other misbehavior by other students[, ]" and thus, the agreements could not form the basis for the plaintiff's breach of contract claim. Id. ¶¶ 18-20.

         {9} The Ruegsegger Court next analyzed the provisions in the student handbook to determine whether there was a claim for breach of implied contract. Id. ¶¶ 21-37. In analyzing the handbook, this Court assumed without deciding that Section 37-1-23(A) did not bar the plaintiff's claim and ultimately held that the plaintiff "failed to state a valid claim for breach of contract based upon the language of the [s]tudent [h]andbook." Ruegsegger, 2007-NMCA-030, ΒΆ 22. We noted that "[t]o establish a claim for breach of implied contract based upon the terms of the [s]tudent [h]andbook, [the p]laintiff was required to demonstrate that those terms created a reasonable expectation of contractual rights. The ...

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