D'Antonio v. Wesley College, Inc. ( 2023 )

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
ANGELA D’ ANTONIO, et al.,
Plaintiffs,
V. C.A. No.: N22C-08-463 EMD
WESLEY COLLEGE, INC., et al.,
Nees ee ee
Defendants.
Submitted: October 13, 2023
Decided: December 29, 2023
Upon Defendants Motion for Judgment on the Pleadings
DENIED
Gary W. Aber, Esquire, Wilmington, Delaware. Attorneys for Plaintiffs Angela D’Antonio,
James Wilson, Victor Greto, Fran Fiedler, E. Jeffrey Mask, Jack Barnhardt, Mika Shipley, David
Laganella, Ron Douglas, Jessica James, Randall Clack, Yu Tian, Malcom D’Souza.
Kevin J. Connors, Esquire, Marshall Dennehey Warner Coleman & Goggin, Wilmington,
Delaware. Attorneys for Defendants Wesley College, Inc. & Robert E. Clark II.
DAVIS, J.
I. INTRODUCTION
This is a civil action arising out of Delaware State University’s acquisition of Wesley
College. Plaintiffs Angela D’Antonio, James Wilson, Victor Greto, Frank Fiedler, E. Jeffrey
Mask, Jack Barnhardt, Mika Shipley, David Laganella, Ron Douglas, Jessica James, Randall
Clack, Yu Tian, and Malcolm D’Souza, (collectively “Plaintiffs”), allege that Defendants Wesley
College, Inc. (“Wesley”) and Wesley’s Former President Robert C. Clark II (together with
Wesley, “Defendants”) (i) engaged in the fraudulent transfer of Wesley’s assets to Delaware State
University (“DSU”) when DSU acquired Wesley in 2021 (“Count I”); ' (ii) that the fraudulent
' Amended Complaint (hereinafter “Am. Compl.”) {J 81-93, pp. 16-17 (D.I. No. 1).
transfer resulted in the breach of Wesley’s employment contracts with Plaintiffs (“Count II”);?
and (iii) that Mr. Clark made “unilateral and intentional” decisions regarding those contracts,
constituting Tortious Interference with Contracts and/or Business Expectancies as Ratified by
Wesley (“Count III”).? Defendants deny all allegations.‘
Plaintiffs initially filed this civil action in the Court of Chancery on May 25, 2021. Upon
filing, Plaintiffs, for themselves and as proposed class representatives of Wesley’s tenured
faculty, sought a preliminary injunction against Defendants to enjoin DSU’s acquisition (the
“Acquisition”).> Plaintiffs also sought class certification.® The Court of Chancery denied the
injunction request on June 21, 2021, and the Acquisition closed on June 30, 2021.’
The Court of Chancery subsequently transferred this action, by stipulation of the Parties
to this Court in July 2022,° and Plaintiffs withdrew their class allegations.® Plaintiffs filed the
Amended Complaint on August 29, 2022.'° Defendants filed their Answer with Affirmative
Defenses on November 11, 2022.'! On May 22, 2023, Defendants then filed an Amended
Answer with Affirmative Defenses. !
Also on May 22, 2023, Defendants filed the Motion for Judgment on the Pleadings
(“Motion”).'? The Motion is limited to Count II of the Amended Complaint, Breach of
Contract."* Plaintiffs and Defendants agree that Plaintiffs remaining claims would be moot if the
2 Id. 99 94-96, p. 18.
3 Id. Ff 81-89, pp. 18-20.
“ Am. Answer of Defs., Wesley College, Inc. and Robert Clark II, to Pls.’ Am. Compl. With Affirmative Defenses
(hereinafter “Am. Answer”) at 29-32 (D.I. No. 18).
° Am. Compl. § 2, pp. 3-4.
§ Id.
” Defs.’ Opening Br. in Supp. of Their Mot. for J. on the Pleadings at 1 (hereinafter “Mot.”) (D.I. No. 19).
8 Stipulation to Transfer Case (Ex. 4 to D.I. No. 1).
° Mot. at 1.
ODI. No. 1.
"DI. No. 6.
2D.I. No. 18.
'3 Mot. at 2.
14 Td.
Court grants the Motion on Count II.'> The Court held a hearing on the Motion on October 13,
2023. At the conclusion of the hearing, the Court took the Motion under advisement.!®
For the reasons stated below, the Motion is DENIED.
Il. STANDARD OF REVIEW
A. MOTION FOR JUDGMENT ON THE PLEADINGS
1. Legal Standard
A party may move for judgment on the pleadings pursuant to Civil Rule 12(c).!7 In
determining a motion for judgment on the pleadings under Civil Rule 12(c), the Court is required
to view the facts pleaded and the inferences to be drawn from such facts in a light most favorable
to the non-moving party.'* The Court must take the well-pleaded facts alleged in the complaint
as admitted.'? The Court also assumes the truthfulness of all well-pled allegations of fact in the
complaint when considering a motion under Civil Rule 12(c).?” The Court must, therefore,
accord the non-moving party the same benefits as a plaintiff defending a motion under Civil Rule
12(b)(6).?!
However, a court will “not rely upon conclusory allegations . . . [and] neither inferences
nor conclusions of fact unsupported by allegations of specific facts . . . are accepted as true.”
'S Id,
'6 DI. No. 46.
'? Civil Rule 12(c) provides:
Motion for judgment on the pleadings—After the pleadings are closed but within such time as not to delay
the trial, any party may move for judgment on the pleadings. If, on a motion for judgment on the
pleadings, matters outside the pleadings are presented to and not excluded by the Court, the motion shall be
treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given
reasonable opportunity to present all material made pertinent to such a motion by Rule 56.
Del. Super. Civ. R. 12(c).
'§ See Desert Equities, Inc. v. Morgan Stanley Leveraged Equity Fund, II, L.P., 624 A.2d 1199, 1205 (Del. 1993); see
also Warner Commc'ns, Inc. v. Chris—Craft Indus., Inc., 583 A.2d 962, 965 (Del. Super.), aff'd without opinion, 567
A.2d 419 (Del. 1989).
'° See Desert Equities, Inc., 624 A.2d at 1205; Warner Commc’ns, Inc., 583 A.2d at 965.
20 See McMillan v. Intercargo Corp., 768 A.2d 492, 500 (Del. Ch. 2000).
2! See id.22 Tq. (internal citations omitted).
Further, “[a] trial court need not blindly accept as true all allegations, nor must it draw all
inferences from them in plaintiffs' favor unless they are reasonable inferences.””* Yet if the non-
moving party “presents any reasonably conceivable set of facts susceptible of proof to support its
claim, the motion against it must be denied. A complaint will not be dismissed unless it is clearly
without merit. Vagueness or lack of detail is not enough for dismissal.”4
With these considerations in mind, the Court may grant a motion for judgment on the
pleadings only when no material issue of fact exists, and the movant is entitled to judgment as a
matter of law.”°
2. The “Pleadings” considered.
On a Civil Rule 12(c) motion, the Court considers all pleadings, including the complaints,
answers, “documents integral to the pleadings,” such as those attached as exhibits or
incorporated by reference, and facts subject to judicial notice.*®
Il. DISCUSSION
To state a claim for breach of contract, the plaintiff must show: “(1) a contractual
obligation; (2) breach of that obligation; and (3) damages caused by the defendant’s breach.”?”
Defendants claim they are entitled to Judgment on the Pleadings because Plaintiffs have
failed to establish the first two elements.”8 Therefore, if the Court finds that Plaintiffs have failed
to allege “any reasonably conceivable set of facts susceptible to support” these elements, then the
33 Jd. (internal citations omitted).
** Velocity Exp., Inc. v. Office Depot, Inc., 2009 WL 406807 at *4 (Del. Super. 2009) (internal citations omitted).
°5 See Desert Equities, Inc., 624 A.2d at 1205; Warner Commce’ns, Inc., 583 A.2d at 965.
26 Jiménez v. Palacios, 250 A. 3d 814, 827 (Del. Ch. 2019); accord Patheon Biologics LLC v. Humanigen Inc., 2023
WL 5041233 at *1 (Del. Super. July 31, 2023); see also Intermec IP Corp. v. TransCore, LP, 2021 WL 3620435, at
*8 (Del. Super. Aug. 16, 2021) (“[T]he Court can consider, limitedly, documents outside the pleadings but integral to
and incorporated referentially into them.”).
27 | Oak Priv. Equity Venture Cap. Ltd. v. Twitter, Inc., 2015 WL 7776758, at *4 (Del. Super. Nov. 20, 2015).
28 Mot. at 10 (citing GEICO Gen. Ins. Co. v. Green, 276 A.3d 462 (Del. 2022); Connelly v. State Farm Mut. Auto.
Ins. Co., 135 A.3d 1271, 1280 fn.28 (Del. 2016)).
Court should grant the Motion.”’ Because Plaintiffs have presented such facts, the Court finds
material issues of fact remain on both elements. Accordingly, the Court will DENY the Motion.
Plaintiffs allege that “the contractual relationships between Wesley and its tenured
faculty” were “based upon continuous appointments, individual contracts, outli{nJing the terms
for the upcoming Academic Years, and a Faculty Handbook which by its express terms was a
contractual document” that contained the “conditions of employment of the tenured faculty,””
Plaintiffs say that “for the applicable school years,” the Faculty Handbook (“Handbook”)
“was expressly incorporated by reference and made part of the contracts” between Plaintiffs and
Wesley.*! As such, Plaintiffs claim that Wesley is bound by several “contractual obligations”
found in the text of the Handbook, and that Wesley’s failure to perform these obligations
constitutes Breach of Contract.**
Plaintiffs make reference to: “Appointments for tenured faculty members are continuous
except in the case of dismissal for cause or discontinuance of a teaching position.”?? Further,
should an academic program be discontinued, Plaintiffs claim that the Handbook obligated
Wesley to “provide notice of such non-continuance by March 15 of the” preceding school year,
and that this notice was to come from the Chief Academic Officer...”°4 The Chief Academic
Officer would then provide “proof of financial exigency.’
° Velocity Exp., 2009 WL 406801 at *4 (internal citations omitted).
3° Am. Compl. { 2, p. 3 (quoting § 2.10.2.1 of the 2019-2020 Faculty Handbook, incorporated by reference in the
Amended Complaint) (identical text is numbered § 2.10.2.2 in the 2020-2021 Faculty Handbook).
3! Jd. Plaintiffs later specifically identify that the 2019-2020 contracts contained the “expressly incorporated by
reference” language. (/d. | 29, p. 8). This is significant because the language does not appear in the 2020-2021
letters/contracts, and Defendants base their argument for Judgment on the Pleadings in part on this change. (See
generally, Mot.).
22 Id. 42, pp. 3-4.
33 Am. Compl. ¥ 26, p. 8.
4 Td. JF 2, 32, 33, pp. 3, 9.
35 I.
Plaintiffs plead that the reason for such notification was to give affected faculty members
“one academic year” to secure other employment.*° Plaintiffs state that, as of March 15, 2020,
“no tenured faculty member” had received notice that any individual positions or academic
programs would be discontinued, nor any proof of financial exigency.>’
Defendants respond to those allegations. Defendants assert, in the Amended Answer, that
Defendants “kept faculty, including Plaintiffs, informed about the acquisition and its potential
effects and consequences on their employment with Wesley.’>®
Plaintiffs next plead that the “contractual relationship” established by the Handbook also
required Wesley to provide tenured faculty with “the applicable Handbook for the upcoming
school year by March 1 of the preceding school year, and provision of the individual contracts by
March 15 of the preceding school year.”3? Contrary to these requirements, Plaintiffs claim that
“neither of those hallmarks were met.’4°
Defendants allege that the Handbook did not “impose contractual obligations on
Wesley.”*! Further, Defendants argue that the Handbook is not relevant because it “did not
contemplate Wesley’s (prospective) nonexistence. Its provisions are inapplicable to a period
when the college was preparing for its dissolution and non-existence. The college’s
36 Am. Compl. 34, p. 9.
37 Am. Compl. § 35, p. 9.
38 Am. Answer at 34 (“Eighth Defense”).
Am. Compl. §§ 2, 30, pp. 3, 8.
“° Id. 2, p. 3. The Parties agree that 2020-2021 contracts were provided to faculty on or around July 15, 2020 (see
Am. Answer at 5). However, for multiple reasons including the absence of a “time is of the essence” clause,
Defendants argue that the delay does not constitute breach. (See Defs.’ Reply Br. in Supp. of Their Mot. For J. on
the Pleadings (hereinafter “Reply”) at 11-13 (D.I. No. 39)).
41 Am. Answer. at 33 (“Sixth Defense”).
(prospective) non-existence constitutes frustration of any alleged contractual obligations vis-a-
vis the future employment of Plaintiffs.”4”
The Court understands Defendants’ arguments. However, at this stage of the
proceedings, the Court looks solely to the pleadings and does not dismiss a complaint unless it
clearly lacks merit. Moreover, viewing the facts in the light most favorable to the non-moving
party, the Court finds that Plaintiffs have presented a “reasonably conceivable set of facts
susceptible to proof” in support of their claim for breach of contract.*? “Vagueness or lack of
detail” is not enough for dismissal. The Court finds there are material issues as to: (i) which
documents may constitute the controlling contract; (ii) which parties may be bound by that
contract, the applicable time frame for binding the parties; and (iii) whether a party may be in
breach of those obligations. In other words, there are material issues of fact as to all elements of
Plaintiffs’ breach of contract claim and Defendants’ Motion therefore fails.
IV. CONCLUSION
For the foregoing reasons, the Motion for Judgment on the Pleadings is DENIED.
IT IS SO ORDERED.
December 29, 2023
Wilmington, Delaware
/s/ Eric M. Davis
Eric M. Davis, Judge
cc: File&ServeExpress
“2 Id, at 34 (“Ninth Defense”). At the same time, Defendants argue that Plaintiffs lack standing to bring this action
because they “failed to comply with the grievance protocol in the Faculty Handbook.” /d. at 33-34 (“Seventh
Defense”).
® Velocity Exp., 2009 WL 406801, at *4.