Opinion
No. CV-02-0100135S
March 3, 2005
MEMORANDUM OF DECISION
On November 27, 2001, the plaintiff, Wendy Tine and the defendants, Philip and Kathleen Colello, doing business as the Nirvana Salon Academy, entered into a contract for instruction in hairdressing. The contract provided that the registration fee was "$100.00 non-refundable," that there was a downpayment of "$650.00 Equipment necessary supplies," and tuition of $6,475.00. It also provided:
[Full payment of tuition is due upon acceptance to the program. Payment must be received on or before the first day of classes,] unless other arrangements have been made. Because space is limited in this private setting, the Academy must have a firm commitment upon rollment (sic) to secure your spot in the course. However, should an applicant wish to withdraw, and does so within the first two weeks of classes, the student will be entitled to a partial refund (up to 50%) of the tuition. After the two-week period, no refunds will be made for students who withdraw, or by way of misconduct, are terminated from the course.
The bracketed portion of the contract had a line drawn through it.
The Test Board fee of forty dollars ($40.00) and State Board licensing fee of fifty dollars ($50.00) are not due until completion of 1500 hours.
Ms. Tine paid the defendants $100, the downpayment, and the $650 for materials and equipment, including a mannequin on which to practice. She also paid $5,475 in cash and executed a promissory note in the amount of $1,000 for the balance of the tuition. The note was payable to the Nirvana Salon Academy, which was not a legal entity, but merely a tradename.
On November 27, 2001 Wendy Tine also signed a document entitled "Student Hourly Contract Agreement," under the terms of which Ms. Tine would attend school 40.5 hours per week, thereby completing the 1500 hours of instruction required in order to obtain a state hairdresser's license in ten and one-half months.
In May of 2002 Ms. Tine requested a leave of absence from Nirvana, which the defendants allowed her to take. She returned in September 2002 and attended Nirvana on a part-time basis. In late October 2002, Ms. Tine became so dissatisfied with her instruction that she decided to leave the school. At that point she had completed 850 of the required 1500 hours. Thereafter she paid $3,500 to another hairdressing school and completed the remaining 650 hours required to obtain her state license.
In late October, after Wendy had been absent from Nirvana for only a short period of time, her father attempted to collect her beauty equipment and supplies, but was informed that Nirvana did not have them.
On August 7, 2002, Krista Hegg signed a contract which was identical to that signed by Ms. Tine. She paid the full tuition of $6,575 in advance with funds borrowed from her mother. She also paid $604.39 for equipment and supplies. Ms. Hegg was very unhappy with the instruction she received and stayed at Nirvana for only three weeks.
The Nirvana Salon Academy consisted of the defendants. Kathleen Colello instructed students in class and her husband, Joseph, provided on-the-job instruction for students working on customers. Nirvana had no set semesters and students were permitted to begin instruction at any time. Notwithstanding the language of the contracts signed by the plaintiffs, the Colellos had not turned away any students from their academy due to the presence of Wendy Tine or Krista Hegg.
Wendy Tine was not satisfied with her instruction at Nirvana because the Colellos rushed students through the instruction too quickly and allowed them to work on the hair of customers before they were completely ready. Tine worked on two to three customers per week, but the Colellos, rather than Tine, received payment for this work. In addition, Kathleen Colello required Ms. Tine to perform tasks which were not related to hairdressing, such as cleaning the bathrooms of the salon.
In addition to believing that the instruction she received was deficient, Ms. Tine also disliked Kathleen Colello's penchant for gossip, which included gossip about Tine's fellow students, and, Tine feared, about herself as well.
Krista Hegg voiced the same type of complaints as Wendy Tine about the nature of the instruction she received at Nirvana Salon Academy and the unprofessional deportment of Kathleen Colello.
The plaintiffs' Amended Complaint of February 4, 2004 is in six counts (the "Complaint"). In the First Count Wendy Tine alleges and in the Fourth Count Krista Hegg alleges a breach of contract on the grounds that the defendants failed to conduct their instruction in a professional manner, contrary to the contract, they demeaned, disparaged, insulted and abused the plaintiff and they failed to provide evidence of training which would permit the plaintiff to enroll in another school.
At sometime after the commencement of this suit the defendants provided Ms. Tine with evidence of the hours of training that she had completed. Therefore, she is no longer seeking injunctive relief with respect to the certificate concerning her hours.
The allegation that the defendants failed to conduct their instruction in a professional manner calls upon the court to evaluate the efficacy of an educational program, which the courts generally decline to do. Gupta v. New Britain General Hospital, 239 Conn. 574, 592, 687 A.2d 111 (1996). Gupta recognized two situations where courts will entertain a cause of action for institutional breach of a contract for educational services:
The first would be exemplified by a showing that the educational program failed in some fundamental respect, as by not offering any of the courses necessary to obtain certification in a particular field. See Wickstrom v. North Idaho College, 111 Idaho 450, 452, 725 P.2d 155 (1986); Ross v. Creighton University, supra, 957 F.2d 417. The second would arise if the educational institution failed to fulfill a specific contractual promise distinct from any overall obligation to offer a reasonable program. See, e.g., Cencor, Inc. v. Tolman, supra, 868 P.2d 399; Paladino v. Adelphi University, supra, 89 App.Div.2d 92.
Neither of the foregoing exceptions apply here. Kathleen Colello testified that all of the students of Nirvana except for the two plaintiffs and two others graduated and passed their state licensing examination. With respect to any failure to fulfill a specific contractual promise, the contract at issue is extremely vague as to exactly what the defendants will do for its students. The plaintiffs claim that the defendants were "unprofessional." However, the contract does not promise that the defendants will be "professional." Moreover, any attempt by the court to determine what constituted unprofessional conduct by a hairdressing school instructor would violate Gupta's prohibition against the court evaluating educational services. For the foregoing reasons judgment may enter against the plaintiffs on the First Count and Fourth Count of the Complaint.
In the Second and Fifth Counts of the Complaint the plaintiffs claim that the defendants were unjustly enriched because the defendants received payment from the plaintiffs for a full 1500 hours of instruction but gave only 850 hours of instruction to Wendy Tine and 120 hours of instruction to Krista Hegg.
"`It is generally held that a contract for schooling for a specified term is entire and that when a student withdraws for reasons of [her] own, without fault on the part of the school, the school is entitled to the tuition for the entire period.' Leo Foundation, Inc. v. Kiernan, 5 Conn. Cir.Ct. 11, 16, 240 A.2d 218 (1967)." St. Margaret's-Mcternan School v. Thompson, 31 Conn.App. 594, 596, 626 A.2d 449 (1993).
In St. Margaret's-Mcternan, a private preparatory school sued the defendant, whose daughter had enrolled in, but had not attended, the school. The enrollment contract executed by the defendant contained the following provisions:
I understand that my obligation to pay the charges for the full academic year is unconditional and that no portion of such charges so paid or outstanding will be refunded or cancelled notwithstanding the subsequent absence, withdrawal or dismissal from the School of the . . . student . . .
Also, it is agreed that enrollment as specified within this contract may be cancelled in writing by the parents or guardians without penalty (except forfeit of the $500 deposit) prior to August 1, 1989, but, if enrollment is cancelled after August 1, 1989, the obligation to pay the full annual charges is binding.
The Court found that the foregoing provisions were in the nature of a liquidated damages clause. In this case the contract provision with respect to full payment of tuition similarly creates a liquidated damages clause.
The Court in St. Margaret's-Mcternan stated:
"It is settled law that a contract provision which imposes a penalty for a breach of the contract is contrary to public policy and is invalid, but a contractual provision which fixes liquidated damages for a breach of contract is enforceable if it satisfies certain conditions . . . The conditions which will justify an agreement for liquidated damages are: (1) The damage which was to be expected as a result of a breach of the contract was uncertain in amount or difficult to prove; (2) there was an intent on the part of the parties to liquidate damages in advance; and (3) the amount stipulated was reasonable in the sense that it was not greatly disproportionate to the amount of the damage which, as the parties looked forward, seemed to be the presumable loss which would be sustained by the contractee in the event of a breach of the contract." (Citations omitted; internal quotation marks omitted.) Norwalk Door Closer Co. v. Eagle Lock Screw Co., 153 Conn. 681, 686, 220 A.2d 263 (1966). No provision in a contract for the payment of a fixed sum as damages will be enforced, however, in a case where the court sees that no damage has been sustained. Id., 688. The party seeking to repudiate a clause that fixes a sum as damages has the burden of showing that the agreed sum is so exorbitant as to be in the nature of a penalty. Syncsort, Inc. v. Indata Services, 14 Conn.App. 481, 485, 541 A.2d 543, cert. denied, 209 Conn. 804, 548 A.2d. ___
The Court in St. Margaret's-Mcternan held that the requirement that the defendant pay full tuition was not a penalty because the trial court expressly found that the damages were uncertain and difficult to prove. The basis of such finding was not clear. However, in many cases involving school tuition, the damages suffered by the institution are based on the fact that the enrollment was full and the school reserved a space for the defaulting student. See, i.e., Bergman v. Bouligny, 82 A.2d 760 (Municipal Court of Appeals for District of Columbia, 1951), relied upon by the Court in Leo Foundation, Inc. v. Kiernan, supra.
In this case the damages are not difficult to prove. Wendy Tine paid $5,575 for 1500 hours of training and received only 850 hours. Therefore, the defendants received $2,415.00 additional tuition for the 650 hours of instruction they did not provide to Ms. Tine. Unlike the school in Bergman, supra, Nirvana Salon Academy was not full, and in accepting Wendy Tine as a student the defendants were not required to and did not turn away other students. The $2,415.00 is a penalty by which the defendants have been unjustly enriched.
Ms. Tine also seeks $650, the amount she paid to the defendants for the equipment and supplies which were not returned to her. The court finds that the defendants should have returned the equipment to Ms. Tine, but failed to do so. Judgment may enter in the amount of $3,065.00 on the Second Count against the defendants in favor of Ms. Tine.
The penalty paid by Krista Hegg was substantially greater than that paid by Wendy Tine. Ms. Hegg received only 120 hours of training, but paid $6,575 for 1500 hours. As with Ms. Tine, the defendants did not turn any students away because they accepted Ms. Hegg as a student and the damages suffered by the school are not difficult to calculate. The school gave Ms. Hegg 120 hours of instruction and, therefore, earned $518. Krista Hegg paid for 1380 hours of instruction which she did not receive. The defendants have been unjustly enriched in that they have retained Ms. Hegg's $6,049.00 for instruction they did not provide to her since 2002. Judgment may enter in favor of Krista Hegg against the defendants on the Fifth Count of the Complaint in the amount of $6,049.00
Due to the presence of the language in the Nirvana student contract which allowed Nirvana to retain the tuition payments, the defendants had a good faith belief that they were entitled to retain the judgment amounts and the court declines to award interest on those amounts under Connecticut General Statutes § 37-3a.
In the Third Count and the Sixth Count of the Complaint the plaintiffs allege that the defendants misrepresented their teaching acumen. A determination of whether or not such misrepresentations were made requires the court to judge the efficacy of an educational program in violation of Gupta, supra. As stated above with respect to the contract counts, the two exceptions recognized in Gupta are not present in this case. Therefore judgment may enter on the Third and Sixth Counts in favor of the defendants.
In the Counterclaim the defendants seek to recover on the promissory note with which Wendy Tine paid $1,000 of her tuition. The note was payable to Nirvana Salon Academy, which was not a person, but rather, a tradename. Therefore it is unenforceable under America's Wholesale Lender v. Silberstein, 87 Conn.App. 485 (2005). The interest rate charged under the note was 15%, violating Connecticut General Statutes § 37-4, which prohibits lending of money at an interest rate higher than 12%. Moreover, in considering Wendy Tine's unjust enrichment claim, the court has not considered the amount of the note to have been paid by the plaintiff, Wendy Tine, or received by the defendants. Judgment may, therefore, enter in favor of the plaintiff, Wendy Tine on the Counterclaim.
By the court,
Aurigemma, J.