Ajibola v. Ohio Med. Career College, Ltd. , 122 N.E.3d 660 ( 2018 )

[Cite as Ajibola v. Ohio Med. Career College, Ltd., 2018-Ohio-4449.]
IN THE COURT OF APPEALS OF OHIO
SECOND APPELLATE DISTRICT
MONTGOMERY COUNTY
ASIA AJIBOLA, et al. :
:
Plaintiffs-Appellants : Appellate Case No. 27975
:
v. : Trial Court Case No. 2017-CV-2373
:
OHIO MEDICAL CAREER COLLEGE, : (Civil Appeal from
LTD., et al. : Common Pleas Court)
:
Defendants-Appellees :
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OPINION
Rendered on the 2nd day of November, 2018.
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RICHARD A. F. LIPOWICZ, Atty. Reg. No. 0018241, 130 West Second Street, Suite
1900, Dayton, Ohio 45402
Attorney for Plaintiffs-Appellants
W. JOSEPH SCHOLLER III, Atty. Reg. No. 0072764 and CHARLES B. GALVIN, Atty.
Reg. No. 0091138, 9277 Centre Point Drive, Suite 300, West Chester, OH 45069
Attorneys for Defendants-Appellees
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FROELICH, J.
{¶ 1} Felecia Madison and Yvette Hubbard appeal a Montgomery County
Common Pleas Court judgment that dismissed with prejudice their claims for breach of
contract, negligence, and fraud, as well as their claims brought under the Ohio Consumer
Sales Practices Act (“OCSPA”). The judgment of the trial court will be reversed and the
matter remanded for further proceedings consistent with this opinion.
Factual Background and Procedural History
{¶ 2} The Ohio Medical Career College, Ltd. (“the College”) is a for-profit nursing
school in Dayton, Ohio, that is owned and operated by Nick Xu and Daisy Deng, a married
couple. Xu acts as the College’s School Director and Deng as its Program Director.
{¶ 3} Sometime prior to February 29, 2016, Madison and Hubbard each explored
the educational offerings available through the College. According to the complaint,
representatives of the College orally represented to Madison and Hubbard that the
College “offered clinical courses in hospital settings” and that Madison and Hubbard
“would graduate with an Associate’s Degree in Applied Sciences in Nursing” if they
successfully completed the College’s “One Plus One Nursing Education Program (RN).”
However, Madison and Hubbard claimed that no one from the College disclosed that, in
order to graduate from that program, students must score at least 850 on the Health
Education Services, Inc. (“HESI”) exam, a standardized test used to predict success on
the NCLEX examination for licensure as a nurse. They further alleged that
representatives of the College failed to disclose that the College’s associate degree
program was on “conditional” status with the Ohio Department of Nursing.1
1
As to the amended complaint’s additional allegation that Madison and Hubbard were not
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{¶ 4} According to the complaint, in reliance on the above representations and
omissions, Madison and Hubbard enrolled in the College’s One Plus One program in
February 2016. Each received a student handbook that described the One Plus One
program and sets forth the following “Student Completion Requirement Policy”:
In order to graduate from the nursing program, the following criteria
must be met:
1. Successful completion of all required credit hours and clinical
instruction hours of the program. All assignments must be completed in the
proper format.
2. Pass all courses (including general education courses) with a
minimum grade of “C” or “Satisfactory”.
3. Satisfactory attendance progress must be met as outlined in the
Attendance Policy.
4. All financial responsibilities must be satisfied prior to graduation.
5. Return of all parking permits, locks, library books, as well as school
and/or other ID cards.
The program does not implement changes to policies for
requirements for completion of the program regarding students already
enrolled in the program at the time the changes are adopted.
told that the College’s One Plus One program “was on ‘provisional’ status” with the Ohio
Board of Nursing, the trial court took judicial notice that such program in fact was not on
provisional status when Madison and Hubbard enrolled. (See 4/9/18 Decision, Order and
Entry Sustaining Defendants’ Motion to Dismiss, p. 4, and 7/28/17 Motion to Dismiss,
Exh. F, Affidavit of Charles B. Galvin, ¶ 9 & Exhs. 3-4 thereto). Madison and Hubbard
have not challenged that finding on appeal, and the “provisional” allegation therefore is
not germane to our current analysis.
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{¶ 5} In addition, the handbook provided that “[e]ach course has a syllabus which
includes the title, number of theory hours, lab hours or clinical hours, course description,
objectives or outcomes, outline, teaching strategies, methods of evaluation, and
requirements for successful completion of the course.” Listed among the courses required
for graduation is “NUR 207: Professional Transitions,” described in the handbook as
follows:
This integrative course utilizes all previous course work to prepare the
student to pass the NCLEX-RN. Topics include strategies and techniques
for test taking [and] developing critical thinking and discrimination, and
prepare the student for a successful career as a registered nurse. A lab
component allows the student computer-assisted instruction to prepare for
the NCLEX RN.
{¶ 6} In January 2017, Madison and Hubbard began what was to have been their
program’s final term of study, which included the “NUR 207” class. At the start of that
course, they were given an “Assignments Schedule” advising that all students would be
required to attain a score of at least 850 on the HESI exam in order to pass NUR 207.
{¶ 7} Despite taking the HESI exam twice during the term, Madison and Hubbard
were among five of the College’s students who failed to achieve the requisite 850 score
and therefore did not graduate. Pursuant to Ohio Adm.Code 3332-1-18, those five
students sought administrative relief by filing complaints with the Ohio Board of Career
Colleges and Schools (“the Board”). In separate decisions issued on May 19, 2017, the
Board advised each complainant that the Board found “no violations” of the College’s
“policies, procedures and NUR 207 syllabus,” and recommended that the students “retake
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NUR 207 in order to pass your program and be eligible for the NCLEX.”
{¶ 8} Madison, Hubbard and the other three students 2 then filed a complaint
against the College, Xu, and Deng in the Montgomery County Common Pleas Court,
which complaint they later amended, setting forth claims for injunctive relief, breach of
contract, negligence, fraud, and violations of OCSPA. The College, Xu and Deng moved
pursuant to Civ.R. 12(B)(6) to dismiss the amended complaint in its entirety.
{¶ 9} On April 9, 2018, the trial court granted the defendants’ motion and dismissed
the entire complaint. In reaching that decision, the trial court took judicial notice of certain
documents not attached to the complaint that the court nonetheless determined were
verifiable and “beyond reasonable dispute.”
{¶ 10} Madison and Hubbard appeal from that final judgment, asserting four
assignments of error:
1. The trial court erred in dismissing Appellants’ claim for fraud.
2. The trial court erred in dismissing Appellants’ claims under [OCSPA].
3. The trial court erred in dismissing Appellants’ breach of contract claim.
4. The trial court erred in dismissing Appellants’ negligence claims.
Standard of Review
{¶ 11} “An order granting a Civ.R. 12(B)(6) motion to dismiss is subject to de novo
review.” Duer v. Henderson, 2d Dist. Miami No. 2009 CA 15, 2009-Ohio-6815, ¶ 68,
quoting Perrysburg Twp. v. Rossford, 103 Ohio St.3d 70, 2004-Ohio-4362, 814 N.E.2d
44, ¶ 5. This means the appellate court “must independently review the complaint to
2
Although five Plaintiffs joined in the complaint and were affected by the trial court’s final
decision, only Madison and Hubbard remain as parties on this appeal.
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determine whether dismissal is appropriate.” Boyd v. Archdiocese of Cincinnati, 2d Dist.
Montgomery No. 25950, 2015-Ohio-1394, ¶ 13, quoting Ament v. Reassure Am. Life Ins.
Co., 180 Ohio App.3d 440, 2009-Ohio-36, 905 N.E.2d 1246, ¶ 60 (8th Dist.).
{¶ 12} In conducting that review, we are “bound to assume that the facts pleaded
in the complaint are true, but the same does not apply to conclusions of law that the
pleader contends are proved by those facts.” Thomas v. Progressive Cas. Ins. Co., Inc.,
2011-Ohio-6712, 969 N.E.2d 1284, ¶ 8 (2d Dist.). We are not to consider “unsupported
conclusions that may be included among, but not supported by, the factual allegations of
the complaint.” Boyd at ¶ 13, quoting Wright v. Ghee, 10th Dist. Franklin No. 01AP-1459,
2002-Ohio-5487, ¶ 19.
{¶ 13} Although the rule itself states that matters to be considered on a Civ.R.
12(B)(6) motion are limited to those that appear within the relevant pleading, material
incorporated within a complaint is part of that pleading. Boyd at ¶ 14, citing State ex rel.
Crabtree v. Franklin Cty. Bd. of Health, 77 Ohio St.3d 247, 249, 673 N.E.2d 1281, fn. 1,
(1997) (“Material incorporated in a complaint may be considered part of the complaint for
purposes of determining a Civ.R. 12(B)(6) motion to dismiss.”). Such material includes
not only exhibits to a complaint, but also written instruments “upon which a claim is
predicated,” regardless of whether such material actually is attached to the pleading. Id.,citing Columbus Green Bldg. Forum v. State, 2012-Ohio-4244, 980 N.E.2d 1, ¶ 23 (10th
Dist.), Fillmore v. Brush Wellman, Inc., 6th Dist. Ottawa No. OT-03-029, 2004-Ohio-3448,
¶ 8, Irvin v. Am. Gen. Fin., Inc., 5th Dist. Muskingum No. CT2004-0046, 2005-Ohio-3523,
¶ 6.
{¶ 14} To dismiss a complaint under Civ.R. 12(B)(6), “it must appear beyond doubt
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that the plaintiff can prove no set of facts * * * that would entitle the plaintiff to the relief
sought.” Bolin v. Allstate Property & Cas. Ins. Co., 2d Dist. Montgomery No. 27764, 2018-
Ohio-3396, ¶ 16, quoting Ohio Bur. of Workers’ Comp. v. McKinley, 130 Ohio St.3d 156,
2011-Ohio-4432, 956 N.E.2d 814, ¶ 12; see also Sacksteder v. Senney, 2d Dist.
Montgomery No. 24993, 2012-Ohio-4452, ¶ 35-46. “The standard for dismissal under
Civ.R. 12(B)(6) is consistent with Civ.R. 8(A), which requires that a complaint ‘contain
* * * a short and plain statement of the claim [or claims] showing that the [plaintiff] is
entitled to relief.’ ” Id., quoting Cincinnati v. Beretta U.S.A. Corp., 95 Ohio St.3d 416, 2002-
Ohio-2480, 768 N.E.2d 1136, ¶ 29.
First Assignment of Error –Fraud Claims
{¶ 15} The elements of fraud are:
(1) a representation (or concealment of a fact when there is a duty to
disclose), (2) that is material to the transaction at hand, (3) made falsely,
with knowledge of its falsity or with such utter disregard and recklessness
as to whether it is true or false that knowledge may be inferred, and (4) with
intent to mislead another into relying upon it, (5) justifiable reliance, and (6)
resulting injury proximately caused by the reliance.
Schroeder v. Henness, 2d Dist. Miami No. 2012 CA 18, 2013-Ohio-2767, ¶ 19, citing
Volbers-Klarich v. Middletown Mgt., Inc., 125 Ohio St.3d 494, 2010-Ohio-2057, 929
N.E.2d 434, ¶ 27.
{¶ 16} Consistent with the foregoing, “[a]n action for fraud may be grounded upon
failure to fully disclose facts of a material nature where there exists a duty to speak.” Lone
Star Equities, Inc. v. Dimitrouleas, 2015-Ohio-2294, 34 N.E.3d 936, ¶ 61 (2d Dist.), citing
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Layman v. Binns, 35 Ohio St.3d 176, 178, 519 N.E.2d 642 (1988). We have recognized
that, before consummating a transaction, a party aware of information “necessary to
prevent his partial or ambiguous statement of the facts from being misleading” is “under
a duty to exercise reasonable care to disclose” such information. See Jack Turturici
Family Trust v. Carey, 196 Ohio App.3d 86, 2011-Ohio-4194, 962 N.E.2d 347, ¶ 28-30
(2d Dist.), quoting 3 Restatement of the Law 2d, Torts, Section 551 (1977).
{¶ 17} Madison and Hubbard contend that the trial court erred by dismissing their
fraud claims. They argue that the amended complaint’s allegations that they enrolled in
the One Plus One nursing program based on certain false statements and material
omissions attributable to the College suffice for purposes of Civ.R. 12(B)(6) to state a
viable cause of action for fraud.
{¶ 18} In response, the College, Xu, and Deng first urge that Madison and Hubbard
waived certain aspects of their fraud claims by failing to appeal the Ohio Board of Career
Colleges and Schools’ administrative decision pursuant to R.C. 119.12(D).3 They also
maintain that no private cause of action exists for violations of the Ohio Administrative
Code. Furthermore, Appellees contend that even if Madison and Hubbard are not
precluded from pursuing claims for alleged violations of the Ohio Administrative Code,
they cannot establish the requisite elements of fraud. Specifically, the College, Xu, and
Deng argue that the alleged misrepresentations and omissions Madison and Hubbard
identify were not material to their enrollment decisions, that Madison and Hubbard did not
3
Although the trial court did not address this waiver argument, we note that Appellees did
raise the same argument in their motion to dismiss, thereby preserving that issue for our
consideration. See Poliseno v. Mitchell, 10th Dist. Franklin Nos. 09AP-1001, 09AP-1022,
2010-Ohio-2615, ¶ 24.
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reasonably rely on those alleged statements and omissions, and that Madison and
Hubbard cannot prove any damages because they failed to successfully complete the
One Plus One program’s graduation requirements.
a. Waiver and No Private Cause of Action
{¶ 19} Although the pleadings contain no evidence regarding the Ohio Board of
Career Colleges and Schools’ decision on Madison and Hubbard’s administrative
complaints under Ohio Adm.Code 3332-1-18, the trial court took judicial notice of the
Board’s letters advising each complainant that it found “no violations” by the College.4
Regardless of the propriety of such judicial notice, we find that Madison’s and Hubbard’s
failure to appeal the Board’s administrative decision does not preclude them from
premising a fraud claim in part on the College’s alleged failure to timely advise them that
they could not graduate without achieving a minimum score of 850 on the HESI exam.
{¶ 20} The amended complaint asserts that the College violated Ohio Adm.Code
3332-1-16(B)(1)(c) 5 by failing to advise prospective students of the HESI score
requirement. Read more broadly per the requirements under Rule 12(B)(6), however, that
pleading also can be construed to allege that, irrespective of the requirements of the
administrative code, the College had a duty to advise Madison and Hubbard of
prerequisites to graduation that they claim would have influenced their decision to enroll.
4See 4/9/18 Decision, Order and Entry Sustaining Defendants’ Motion to Dismiss, p. 4,
and 7/28/17 Motion to Dismiss, Exh. D (5/19/17 letter from State Board of Career Colleges
and Schools to Yvette Hubbard) and Exh. E (5/19/17 letter from State Board of Career
Colleges and Schools to Felecia Madison).
5 There, the code requires all approved career college programs of instruction to
“concisely and accurately convey[ ] * * * graduation requirements” to any prospective
student.
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Accordingly, while Madison and Hubbard may have waived their right to an administrative
remedy by failing to appeal the Board’s administrative decision, we determine that they
did not relinquish their right to pursue a separate civil action by declining to undertake an
administrative appeal.
{¶ 21} Our conclusion that a duty to disclose could arise independent of the
administrative code provisions also disposes of Appellees’ assertion that no private right
of action exists for violations of Ohio Adm.Code 3332-1-16(B)(1)(c). Madison and
Hubbard’s fraud claims are not dependent on the existence of an administrative code
violation. Accordingly, we will proceed to examine the sufficiency of Madison and
Hubbard’s fraud allegations under Civ.R. 12(B)(6) standards.
b. Sufficiency of Fraud Allegations
{¶ 22} Having reviewed the allegations set forth in the amended complaint, we are
not persuaded that Madison and Hubbard “can prove no set of facts” that would entitle
them to the relief they seek on their fraud claims. See Bolin, 2d Dist. Montgomery No.
27764, 2018-Ohio-3396, at ¶ 16. To the contrary, Madison and Hubbard have set forth
all the facts necessary to state a viable cause of action for fraud. See Schroeder. 2d Dist.
Miami No. 2012 CA 18, 2013-Ohio-2767, at ¶ 19. Specifically, Madison and Hubbard
allege that agents of the College falsely represented that the One Plus One program
would include clinical experience in hospital settings and would lead to an associate
degree in nursing. They further allege that the College’s representatives failed to disclose
that an associate degree was not available through the One Plus One program and that
students would need to score 850 or above on the HESI exam in order to graduate. In
addition, Madison and Hubbard claim to have relied on the College’s false representations
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and omissions to their detriment when they enrolled in the One Plus One program.
Accepted as true for purposes of Civ.R. 12(B)(6), Madison and Hubbard’s factual
allegations adequately articulate the requisite elements of a fraud claim.
{¶ 23} We are not dissuaded from that conclusion by the College, Xu, and Deng’s
denial that they had a duty to disclose either the HESI exam score requirement or the
unavailability of an associate degree through the One Plus One program. Especially given
the student handbook’s explicit “Student Completion Requirement Policy,” a reasonable
trier of fact could find that omission of the HESI exam score requirement from that list
might mislead prospective students, thereby creating a duty for the College to disclose
the missing information. See Jack Turturici Family Trust, 196 Ohio App.3d 86, 2011-Ohio-
4194, 962 N.E.2d 347, at ¶ 28-30. At this stage of the proceedings, we cannot say as a
matter of law that Madison and Hubbard would be unable to show they were misled by
the allegedly inaccurate or incomplete information the College provided.
{¶ 24} Additionally, while Appellees characterize the alleged misrepresentations
and omissions as immaterial to Madison and Hubbard’s enrollment decisions, Madison
and Hubbard maintain that they relied on the information presented in deciding that the
One Plus One program “might lead to better job opportunities” because that program
offered more immersive clinical experience and an associate degree rather than a
diploma. Although Appellees also urge that Madison’s and Hubbard’s reliance was
unjustified because “accurate and reliable information” about the College’s programs was
available “in the public domain,” they offer no authority to support that proposition.
{¶ 25} Conversely, this court has stated that “[r]eliance is justifiable if the
representation does not appear unreasonable on its face and if there is no apparent
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reason to doubt the veracity of the representation under the circumstances.” Amerifirst
Savings Bank of Xenia v. King, 196 Ohio App.3d 468, 495, 737 N.E.2d 68 (2d Dist.1999),
citing Lepera v. Fuson, 83 Ohio App.3d 17, 26, 618 N.E.2d 1060 (1st Dist.1992).
Moreover, “[t]he question of justifiable reliance is one of fact and requires an inquiry into
the relationship between the parties.” (Emphasis added.) Id., quoting Crown Prop. Dev.,
Inc. v. Omega Oil Co., 113 Ohio App.3d 647, 657, 681 N.E.2d 1343 (12th Dist.1996); see
also Mulch Mfg., Inc. v. Advanced Polymer Solutions, LLC, 947 F.Supp.2d 841, 862
(S.D.Ohio 2013). We reject the notion that Madison and Hubbard were obliged as a matter
of law to check other sources in order to verify or refute the information provided by the
College itself. Because the issue of justifiable reliance is one of fact, it cannot be resolved
via a Civ.R. 12(B)(6) motion to dismiss.
{¶ 26} Finally, we conclude that the trial court erred in finding that Madison and
Hubbard are unable to prove any damages caused by the alleged fraud. The trial court
reasoned, and Appellees argue on appeal, that because Madison and Hubbard failed to
graduate and cannot take the NCLEX licensing exam, their job prospects were unaffected
by the One Plus One program’s lack of in-hospital clinical training and ineligibility to award
an associate degree. Notably, however, the amended complaint avers not that Appellees
committed fraud in how they performed an existing contract, but rather that the College
and its representatives fraudulently induced Madison and Hubbard to enter enrollment
agreements with the College. The distinction between fraud in performing a contract and
fraud in inducing that contract may be significant. See, e.g., Curt Collins Co., Inc. v.
Dudich, 9th Dist. Summit No. 8022, 1976 WL 188882, *4 (Aug. 18, 1976) (“It should be
kept in mind that the fraud here was in the inducement and not the performance of the
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contract.”). “A party who has been fraudulently induced to enter into a contract has the
option of rescinding the contract or seeking damages based upon the tort of fraudulent
inducement.” Simon Property Group, LP v. Kill, 3d Dist. Allen No. 1-09-30, 2010-Ohio-
1492, ¶ 30. The measure of damages for fraudulent inducement would be “the actual
natural losses flowing from the fraud.” Curt Collins Co. at *4; see also Simon Property
Group at ¶ 30 (sustaining trial court’s ruling that plaintiff was not required to pay increased
rent owed under new lease induced through fraud).
{¶ 27} This court, too, has recognized that a plaintiff’s out-of-pocket losses
incurred due to the parties’ contract may be the appropriate measure of damages for a
claim of fraudulent inducement. See Wright v. Spaghetti Place, Inc., 2d Dist. Montgomery
No. 8110, 1984 WL 4418, *5 (May 8, 1984); see also Melenick v. McManamon, 8th Dist.
Cuyahoga Nos. 92453, 92675, 2010-Ohio-1051, ¶ 42 (“Generally, a party injured by fraud
can receive [any] damages ‘naturally and proximately resulting from the fraud.’ ”).
Because the amended complaint adequately alleges that Madison and Hubbard would
not have incurred the cost of tuition and other expenses of matriculating in the One Plus
One program but for the College’s allegedly fraudulent conduct, they have set forth factual
allegations sufficient to withstand a Civ.R. 12(B)(6) motion to dismiss on the issue of
damages. Madison and Hubbard’s first assignment of error is sustained.
Third Assignment of Error –Breach of Contract Claims
{¶ 28} Madison and Hubbard contend that the trial court also erred in dismissing
their claims for breach of contract. The parties apparently agree that the contract between
Madison and Hubbard and the College consisted of the Enrollment Agreements Madison
and Hubbard signed, together with the student handbook. The amended complaint
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alleges that the College breached that contract by, among other things, imposing a
minimum HESI exam score as a graduation requirement that was not mentioned within
the student handbook’s “Student Completion Requirement Policy.” The trial court,
however, found that “[a] minimum score on the HESI exam was a class requirement” for
the NUR 207 course, “just like any other test, quiz or lab assignment,” and “did not violate”
the student handbook or the Enrollment Agreements.
{¶ 29} In so finding, the trial court relied heavily on Hendrix v. Northern Kentucky
Univ., E.D.Ky. No. 2:14-cv-00079 (WOB-CJS), 2015 WL 7430149 (Aug. 10, 2015), a case
involving substantially similar facts. Significantly, however, the Hendrix decision was
before the federal district court on a motion for summary judgment, not a Civ.R. 12 motion
to dismiss. See id. at *1. Accordingly, the court there was not constrained, as we are, “to
assume that the facts pleaded in the complaint are true.” See Thomas, 2011-Ohio-6712,
969 N.E.2d 1284, at ¶ 8. Unlike the court that decided Hendrix, we may uphold the
decision against Madison and Hubbard only if it “appear[s] beyond doubt” that they “can
prove no set of facts * * * that would entitle [them] to the relief sought.” See Bolin, 2d Dist.
Montgomery No. 27764, 2018-Ohio-3396, at ¶ 16.
{¶ 30} Just as we determined above with respect to Madison and Hubbard’s fraud
claims, we cannot conclude at this juncture that Madison and Hubbard would be unable
to prove any set of facts that might warrant relief on their breach of contract claims. In this
case, Madison and Hubbard contend that Program Director Deng actually admitted to
them that the minimum HESI score was not merely a component of one course, but rather
“a separate graduation requirement.” Other disputed or distinguishing issues of fact may
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remain.6 For that reason, Madison and Hubbard’s third assignment of error is sustained.
Fourth Assignment of Error –Negligence Claims
{¶ 31} We reach a similar conclusion as to Madison and Hubbard’s contentions
regarding a portion of their negligence claims dismissed by the trial court. “The elements
of negligent misrepresentation are as follows: ‘One who, in the course of his business,
profession or employment, or in any other transaction in which he has a pecuniary
interest, supplies false information for the guidance of others in their business
transactions, is subject to liability for pecuniary loss caused to them by their justifiable
reliance upon the information, if he fails to exercise reasonable care or competence in
obtaining or communicating the information.’ ” (Emphasis sic.) (Citations omitted.)
Delman v. Cleveland Hts., 41 Ohio St.3d 1, 4, 534 N.E.2d 835 (1989).
{¶ 32} Citing Lawrence v. Lorain Cty. Community College, 127 Ohio App.3d 546,
713 N.E.2d 478 (9th Dist.1998), the trial court determined that Madison and Hubbard’s
allegations of negligence amounted to “a claim for substandard educational services” not
cognizable under Ohio law. On appeal, Madison and Hubbard do not challenge the
Lawrence holding, but urge that their amended complaint includes allegations
distinguishable from those before the court in Lawrence. We agree.
{¶ 33} As described by the Ninth District Court of Appeals in that case:
Lawrence maintains that, upon payment of tuition, the College gave him a
catalog of course offerings and academic policies. He alleges that this
catalog constituted a contract under which the College was to provide him
6 For example, a factual question exists as to whether the “Assignments Schedule”
provided to Appellants at the outset of their NUR 207 course satisfied the student
handbook’s requirement that the College produce a “syllabus” for each course.
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a degree as a registered nurse. He then asserts that the College breached
its contract with him “by providing substandard education, guidance and
supervision[.]”
Id. at 548. Agreeing that such claims “mask[ed] allegations of educational malpractice”
barred as a cause of action in Ohio, the appellate court affirmed the trial court’s dismissal
of those claims under Civ.R. 12(B)(6). Id. at 549.
{¶ 34} The negligence cause of action within Madison and Hubbard’s complaint
does contain comparable allegations of negligent supervision and negligent failure “to
provide * * * proper instruction, remediation, and text materials.” In contrast to the
allegations described in Lawrence, however, Madison and Hubbard also affirmatively
allege that the College and its agents “negligently made false or misleading
representations” to them. For the reasons discussed in the context of their fraud claims,
Madison and Hubbard’s allegations suffice to set forth a viable claim for negligent
misrepresentation, distinguishable from the purported claims for breach of contract and
breach of the duty of good faith and fair dealing found in Lawrence to have been properly
dismissed. Madison and Hubbard’s fourth assignment of error therefore is sustained as
to the trial court’s dismissal of their claims for negligent misrepresentation.
Second Assignment of Error –OCSPA Claims
{¶ 35} Madison and Hubbard’s remaining assignment of error challenges the trial
court’s dismissal of their claims under the Ohio Consumer Sales Practices Act. In
dismissing those claims, the trial court relied on the rationale for its dismissal of Madison
and Hubbard’s negligence and fraud claims, stating that the facts alleged in the amended
complaint, “even presumed as true, do not support a cause of action for violations of
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OCSPA.”
{¶ 36} Having determined above that Madison and Hubbard’s factual allegations
state claims for both fraud and negligence sufficient to withstand a Civ.R. 12(B)(6) motion
to dismiss, we likewise conclude that the trial court erred by dismissing Madison and
Hubbard’s OCSPA claims premised on those same factual allegations. Pursuant to Ohio
Adm.Code 109:4-3-10(A),
It shall be a deceptive act or practice in connection with a consumer
transaction for a supplier to:
(A) Make any representations, claims, or assertions of fact, whether orally
or in writing, which would cause a reasonable consumer to believe such
statements are true, unless, at the time such representations, claims, or
assertions are made, the supplier possesses or relies upon a reasonable
basis in fact such as factual, objective, quantifiable, clinical or scientific data
or other competent and reliable evidence which substantiates such
representations, claims, or assertions of fact;
***
{¶ 37} It is undisputed for purposes of this appeal that the College is a “supplier,”
that Madison and Hubbard are “consumer[s],” and that their contract for educational
services was a “consumer transaction” within the meaning of the foregoing regulation.
While Appellees characterize Madison and Hubbard’s OCSPA claims as “nothing more
than a dressed-up claim for educational malpractice,” we previously determined that
Madison and Hubbard’s factual allegations go beyond those found to present only a non-
cognizable claim for educational malpractice. See Lawrence, 127 Ohio App.3d at 548-
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549, 713 N.E.2d 478. For that reason, Madison and Hubbard’s second assignment of
error is sustained.
Conclusion
{¶ 38} The judgment of the trial court will be reversed, and this matter will be
remanded for further proceedings consistent with this opinion.
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WELBAUM, P.J. and TUCKER, J., concur.
Copies sent to:
Richard A. F. Lipowicz
W. Joseph Scholler III
Charles B. Galvin
Phyllis Brown
Adam Brown
Chevelle Bennett
Hon. Barbara P. Gorman