Mountain State College v. Sheryl Holsinger , 230 W. Va. 678 ( 2013 )

IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA
January 2013 Term
_______________
FILED
No. 11-1203 March 28, 2013
released at 3:00 p.m.
_______________ RORY L. PERRY II, CLERK
SUPREME COURT OF APPEALS
OF WEST VIRGINIA
MOUNTAIN STATE COLLEGE,
Defendant Below, Petitioner
v.
SHERYL HOLSINGER, SANDRA R. CARPENTER AND
MARY J. YEATER,
Plaintiffs Below, Respondents
____________________________________________________________
Appeal from the Circuit Court of Kanawha County
The Honorable Tod J. Kaufman, Judge
Civil Action No. 98-C-1497
REVERSED AND REMANDED
____________________________________________________________
Submitted: March 5, 2013
Filed: March 28, 2013
John Philip Melick, Esq. Bren J. Pomponio, Esq.
Richard Grady Ford, Esq. Daniel F. Hedges, Esq.
Jackson Kelly PLLC Mountain State Justice Inc.
Charleston, West Virginia Charleston, West Virginia
Counsel for the Petitioner Counsel for the Respondents
The Opinion of the Court was delivered PER CURIAM.
SYLLABUS BY THE COURT
1. “Where the language of a statute is clear and without ambiguity the
plain meaning is to be accepted without resorting to the rules of interpretation.” Syl. pt. 2,
State v. Elder, 152 W. Va. 571, 165 S.E.2d 108 (1968).
2. “Extrinsic evidence of statements and declarations of the parties to
an unambiguous written contract occurring contemporaneously with or prior to its
execution is inadmissible to contradict, add to, detract from, vary or explain the terms of
such contract, in the absence of a showing of illegality, fraud, duress, mistake or
insufficiency of consideration.” Syl. pt. 1, Kanawha Banking & Trust Co. v. Gilbert, 131
W. Va. 88, 46 S.E.2d 225 (1947).
3. “Contract language is considered ambiguous where an agreement’s
terms are inconsistent on their face or where the phraseology can support reasonable
differences of opinion as to the meaning of words employed and obligations undertaken.”
Syl. pt. 6, State ex rel. Frazier & Oxley v. Cummings, 212 W. Va. 275, 569 S.E.2d 796(2002).
4. “A court of equity is without jurisdiction to entertain a suit based on
an alleged fraudulent misrepresentation to the prejudice of the complaining party, where
the sole relief sought therein is the recovery of damages. In such a case the remedy of the
i
injured party at law is plain, adequate and complete.” Syl. pt. 2, Lake O’Woods v.
Wilhelm, 126 W. Va. 447, 28 S.E.2d 915 (1944).
5. “Equity will not entertain a suit to recover damages for a fraud
which amounts to a tort remediable by an action at law for fraud and deceit.” Syl pt. 1,
Wilt v. Crim, 87 W. Va. 626, 105 S.E. 812 (1921).
6. “Where one person induces another to enter into a contract by false
representations which he is in a situation to know, and which it is his duty to know, are
untrue, he, in contemplation of law, does know the statements to be untrue, and
consequently they are held to be fraudulent, and the person injured has a remedy for the
loss sustained by an action for damages. It is not indispensable to a recovery that the
defendant actually knew them to be false.” Syl. pt. 1, Horton v. Tyree, 104 W. Va. 238,
139 S.E. 737 (1927).
ii
Per Curiam:
Petitioner Mountain State College, defendant below, appeals the July 20,
2011, amended judgment order of the Circuit Court of Kanawha County that granted
judgment in relevant part in favor of the respondents who were plaintiffs below and
graduates of the petitioner college’s legal assisting program. In its order, the circuit court
found that the enrollment agreement between the college and the respondents was
unconscionable and induced by unconscionable conduct. For the reasons that follow, we
reverse and remand this case to the circuit court for the entry of judgment as a matter of
law in favor of Mountain State College.
I. FACTUAL AND PROCEDURAL BACKGROUND
Petitioner Mountain State College (hereinafter “the college”) is a for-profit
community college located in Parkersburg, West Virginia.1 The respondents graduated
from the college’s legal assisting program with associate degrees. Respondent Sherry
Holsinger graduated in September, 1992. Respondents Sandra Carpenter and Mary
Yeater Murphy graduated in December, 1992. Prior to attending the college the
respondents were high school graduates and worked in low-wage jobs.
1
The petitioner college is not to be confused with the former Mountain State University
located in Beckley, West Virginia.
1
In June, 1998, the respondents filed a complaint against the college and
several other parties.2 By the time the respondents’ case came to trial in the Circuit Court
of Kanawha County in May, 2010, the college was the only defendant remaining. The
gravamen of the respondents’ complaint was that the college induced the respondents to
enroll in the college’s legal assisting program by verbally guaranteeing legal assistant
jobs to the respondents after graduation.
At trial, Respondent Sandra Carpenter testified that employees of the
college represented to her prior to enrollment that legal assistants would be in high
demand by the time she graduated, that she could make up to $40,000 a year in a legal
assistant position, and that the college’s job placement office placed 95% of graduates in
jobs. She further testified that after graduating she never obtained a legal assistant
position despite sending out 50 resumes and having one interview. Finally, she testified
that she now owes $42,319.00 in student loans.
Respondent Sherry Holsinger also testified that a college employee
promised her there would be a great demand for legal assistants. According to Ms.
Holsinger, this employee told her that she would make between $24.00 and $27.00 an
hour as a legal assistant. She further testified that despite doing everything she was told to
do by the job placement office, she never received a position as a legal assistant. She
indicated that she is now in default on her student loan debt of $56,685.52. In addition,
2
In April 1999, the respondents filed an amended complaint.
2
Ms. Holsinger stated that despite her desire to work, she will not do so because the
federal government will garnish her wages. Finally, she stated that the government had
begun taking her income tax refunds as a result of her default in repayment of her student
loans.
The third respondent, Mary Yeater Murphy, testified at trial that prior to
enrolling in the legal assistant program she spoke to a man named Chris in the college’s
admissions office who informed her that she could make between $30,000 and $40,000 a
year as a legal assistant. According to Ms. Murphy, Chris guaranteed that she would
receive a legal assistant position if she completed the college’s program, stating that she
would “fall into” a job as a result of the efforts of the college’s placement office. Ms.
Murphy further testified that Chris informed her of a survey conducted by the college
which showed that 95% of local attorneys would be looking to hire legal assistants. Ms.
Murphy explained that after her graduation, she received a list from the job placement
office with from 30 to 50 attorneys’ names on it. She sent out resumes to these attorneys
and conducted follow-up phone calls, but never received a job as a legal assistant.
According to Ms. Murphy, she actively sought a legal assistant position for about two
years after her graduation with no success. Finally, Ms. Murphy indicated that she now
owes between $27,933.16 and $45,000 in student loans.3
3
Ms. Murphy’s testimony regarding the amount of her student loan is unclear.
3
After the respondents closed their case-in-chief, the college moved for
judgment as a matter of law. The circuit court granted the college’s motion with regard to
the respondents’ fraudulent inducement claims. The court indicated at that time that the
case “is [whittled] down to that unconscionability case. That’s the only thing going to the
jury.” Nevertheless, the circuit court permitted the jury to answer a special interrogatory
on the issue of equitable relief based on fraudulent inducement.
In its defense, the college presented the testimony of several of its officials
who testified essentially that employees of the college did not guarantee jobs to students
in the legal assisting program during the period in question, and that the college assisted
its students in finding jobs after graduation.4
4
Despite a pre-trial ruling by the circuit court that evidence of “educational malpractice”
would not be admissible at trial, the circuit court permitted the admission of such
evidence on the basis that the college’s witnesses “opened the door” regarding the quality
of the respondents’ education. The circuit court permitted the respondents to present the
testimony of Timothy Amos, a local real estate lawyer, who testified that in the late
1990’s, his law firm terminated the employment of two legal assistants who were
graduates of the college based on their insufficient skills. He further opined that the
college had a bad reputation in the local area for graduating people with insufficient
skills. The respondents also were allowed to present as a witness James Skidmore,
Chancellor and former Vice Chancellor of the State’s Community and Technical College
System, who testified that he had received complaints about the college’s legal assisting
program. According to Mr. Skidmore, he conducted an investigation of the college and
found that the college had misrepresented its legal assisting program. The circuit court
then permitted the parties to present rebuttal and surrebuttal testimony regarding, inter
alia, the quality of the college’s legal research materials.
4
At the close of the evidence, the circuit court gave two special
interrogatories to the jury, one on unconscionable inducement and the other on fraudulent
inducement. The jury found that the college engaged in both unconscionable and
fraudulent inducement and recommended an award of $30,000 to each respondent in
restitution for the student loan debt incurred by each respondent. The jury further
recommended an award of $20,000 to each respondent in actual damages.
In its judgment order, the circuit court found unconscionable inducement as
a matter of law. In its conclusions of law, the circuit court found as follows:
5. The Court may declare any agreement unconscionable and
unenforceable, “if the court as a matter of law finds: (a) The
agreement or transaction to have been unconscionable at the
time it was made, or to have been induced by unconscionable
conduct, or (b) Any . . . part of the agreement to have been
unconscionable at the time it was made.” W. Va. Code §
46A-2-121(1).
6. When there is a claim of an unconscionable contract, state
law requires a full evidentiary presentation. See id. § 46A-2­
121(2). Parties must be allowed to present evidence as to the
contract’s commercial setting, purpose, and effect:
A determination of unconscionability must
focus on the relative positions of the parties, the
adequacy of the bargaining position, and the
existence of meaningful alternatives available to
the plaintiffs. A bargain may be unconscionable
if there is “gross inadequacy in bargaining
power, together with terms unreasonably
favorable to the stronger party. . . .” Gross
inadequacy in bargaining power may exist
where consumers are totally ignorant of the
implications of what they are signing, or where
the parties involved in the transaction include a
national corporate lender on one side and
5
unsophisticated, uneducated consumers on the
other.
....
Inasmuch as the evidence before the
court suggests that the bargaining power of the
plaintiffs may have been grossly inadequate and
that the plaintiffs may not have had any
meaningful alternative to obtaining loans from
defendants, a question of fact exists as to
whether the transactions were unconscionable.
Hager v. American Gen. Fin., Inc., 37 F.Supp.2d 778, 786-87
(S.D.W. Va. 1999) (citations omitted); see also Knapp v.
American Gen. Fin., Inc., 111 F.Supp.2d 758, 764-65
(S.D.W. Va. 2000 (summary judgment inappropriate).
7. The disparity of bargaining positions in this situation was
nearly identical to a circumstance the Supreme Court of
Appeals of West Virginia concluded was “grossly unequal.”
See Arnold v. United Cos. Lending Corp., 204 W. Va. 229,
236, 511 S.E.2d 854, 861 (1998).
8. The Court CONCLUDES the loan was induced by
unconscionable conduct due to the following:
(a) The initial misrepresentation that there would be a
great demand for paralegal jobs in the Parkersburg area; and
(b) The misrepresentations that the Defendant would
place students in jobs as paralegals;
9. The Court CONCLUDES that the agreement for
enrollment was so one-sided insofar as the Defendant
received the significant tuition from the Plaintiffs but
provided no educational or job placement services in return.
[T]he agreement was so one sided that it shocks the
conscience of the Court.
10. Having concluded that the loan was induced by
unconscionable conduct, the Court CONCLUDES that the
agreements were unenforceable as a matter of law.
11. Each Plaintiff is entitled to restitution of $30,000 on their
student loans.
12. Each Plaintiff is entitled to actual damages in the amount
of $20,000.
6
The college’s subsequent motion for judgment as a matter of law or, in the
alternative, motion for a new trial was denied in relevant part by the circuit court in its
July 20, 2011, amended judgment order.5
II. STANDARD OF REVIEW
The college appeals the circuit court’s denial of its motion for judgment as
a matter of law. We have held that “[t]he appellate standard of review for an order
granting or denying a renewed motion for a judgment as a matter of law after trial
pursuant to Rule 50(b) of the West Virginia Rules of Civil Procedure [1998] is de novo.”
Syl. pt. 1, Fredeking v. Tyler, 224 W. Va. 1, 680 S.E.2d 16 (2009). We further have
elaborated concerning our standard of review that
[w]hen this Court reviews a trial court’s order granting or
denying a renewed motion for judgment as a matter of law
after trial under Rule 50(b) of the West Virginia Rules of Civil
Procedure [1998], it is not the task of this Court to review the
facts to determine how it would have ruled on the evidence
presented. Instead, its task is to determine whether the
evidence was such that a reasonable trier of fact might have
reached the decision below. Thus, when considering a ruling
on a renewed motion for judgment as a matter of law after
trial, the evidence must be viewed in the light most favorable
to the nonmoving party.
Id. at Syl. pt. 2. Guided by this standard, we now consider the matter before us.
5
In the circuit court’s July 20, 2011, amended judgment order and stay of execution
pending appeal, the court granted relief to the college solely in ruling that the
prejudgment interest on tuition awarded in its original judgment order was already
included in the $30,000 in restitution. In all other respects, the circuit court denied the
college’s motion for judgment as a matter of law.
7
III. DISCUSSION
1. Applicability of Consumer Credit Protection Act
The college asserts error in the circuit court’s finding that the college
violated W. Va. Code § 46A-2-121 (1996), which is part of the West Virginia Consumer
Credit and Protection Act (“the Act”). The circuit court did not make a specific finding
that the Act applies to this case but apparently presumed the Act’s applicability in ruling
that the college violated W. Va. Code § 46A-2-121. It is the college’s position that the
Act applies only to creditors and that the college is not a creditor under the facts of this
case.
The respondents counter that W. Va. Code § 46A-2-121(1) expressly
applies “to a transaction which is or gives rise to a consumer credit sale.” The
respondents posit that the transaction at issue, which is the enrollment agreement, clearly
falls under the definition of consumer credit sale in W. Va. Code § 46A-1-102(13)(a)
(1996), which provides:
(13)(a) Except as provided in paragraph (b), “consumer credit
sale” is a sale of goods, services or an interest in land in
which:
(i) Credit is granted either by a seller who regularly engages
as a seller in credit transactions of the same kind or pursuant
to a seller credit card;
(ii) The buyer is a person other than an organization;
(iii) The goods, services or interest in land are purchased
primarily for a personal, family, household or agricultural
purpose;
(iv) Either the debt is payable in installments or a sales
finance charge is made; and
8
(v) With respect to a sale of goods or services, the amount
financed does not exceed forty-five thousand dollars or the
sale is of a factory-built home as defined in section two [§ 37­
15-2], article fifteen, chapter thirty-seven of this code.
(b) “Consumer credit sale” does not include a sale in which
the seller allows the buyer to purchase goods or services
pursuant to a lender credit card or similar arrangement.
The respondents assert that the college is the seller of services that are financed by credit
– specifically student loans. The respondents explain that they signed an enrollment
agreement expressly stating that they would obtain student loans to pay their tuition, and
that this agreement otherwise meets the requirements of a consumer credit sale in the
above quoted code section. The respondents conclude that the college’s enrollment
agreement falls under the Act’s definition of a consumer credit sale.
Upon close examination of the definition of a consumer credit sale in W.
Va. Code § 46A-1-102(13), this Court concludes that the enrollment agreement between
the respondents and the college does not constitute a consumer credit sale. A basic rule
in determining the meaning of a statute is “[w]here the language of a statute is clear and
without ambiguity the plain meaning is to be accepted without resorting to the rules of
interpretation.” Syl. pt. 2, State v. Elder, 152 W. Va. 571, 165 S.E.2d 108 (1968). We
believe that the language of W. Va. Code § 46A-1-102(13) is clear and unambiguous.
The code section provides in part that a “‘consumer credit sale’ is a sale . . .
of services . . . in which: (i) Credit is granted either by a seller who regularly engages as a
seller in credit transactions of the same kind or pursuant to a seller credit card[.]” By its
9
plain terms, to constitute a consumer credit sale, credit is granted to the consumer by a
seller who regularly engages in credit transactions of the same kind or pursuant to a seller
credit card. See also Black’s Law Dictionary 1454 (9th ed. 2009) (defining “consumer
credit sale” as “[a] sale in which the seller extends credit to the consumer.”). In the
instant case, credit was not granted to the respondents by the college, which is the seller
of education services, nor did the college grant credit to the respondents pursuant to a
seller credit card. Instead, credit was granted to the respondents in the form of student
loans by parties no longer involved in this case. To put it simply, the college as the seller
of education services did not extend credit to the respondents for the payment of those
services. As a result, the enrollment agreement between the respondents and the college
does not meet the definition of a consumer credit sale under W. Va. Code § 46A-1­
102(13)(a)(i). Accordingly, the respondents do not have cognizable causes of action for
unconscionability and inducement by unconscionable conduct pursuant to W. Va. Code §
46A-2-121, and the circuit court’s ruling to the contrary constitutes error.
2. Unconscionability as a Contract Action
Another issue raised by the college is that the circuit court erred in finding
the enrollment agreement between the college and respondents unconscionable under our
common law of contracts.6 The college posits that the enrollment agreement contained no
6
Interestingly, the respondents brought an unconscionability claim against the college as
a stand-alone action and not in response to a claim for breach of contract.
Unconscionability generally is considered to be an affirmative defense to a claim for
(continued . . .)
10
guarantee of employment and, as a result, there was no evidence that the agreement was
unconscionable. Further, the college avers that extrinsic evidence of a job guarantee was
not admissible and was not part of the written enrollment agreement. The respondents
reply that they properly prevailed on three contract actions below: unconscionability, lack
of consideration,7 and inducement by unconscionable conduct. They further contend that
extrinsic evidence of the terms of the enrollment agreement was admissible because the
agreement was ambiguous, and the extrinsic evidence was admitted to show fraud and
lack of consideration.
The parties do not dispute that the written enrollment agreement between
the respondents and the college does not contain a promise of job placement. Rather, the
circuit court’s finding of unconscionability is based on evidence of the verbal promises of
job placement allegedly made by representatives of the college. Therefore, the
breach of contract. See State ex rel. Johnson Controls, Inc. v. Tucker, 229 W. Va. 486,
729 S.E.2d 808 (2012) (describing unconscionability as a contract defense); State ex rel.
Richmond Am. Homes of W. Va., Inc. v. Sanders, 228 W. Va. 125, 717 S.E.2d 909 (2011)
(same); State ex rel. Anstey v. Davis, 203 W. Va. 538, 509 S.E.2d 579 (1998)
(charactering lack of consideration as a defense); Dieter Engineering Serv., Inc. v.
Parkland Dev., Inc., 199 W. Va. 48, 483 S.E.2d 48 (1996) (same).
7
With regard to the respondents’ claim that they prevailed on a lack of consideration
claim, we note that the circuit court did not send an interrogatory to the jury on the issue
of lack of consideration. In addition, while the circuit court found a lack of consideration
as part of its unconscionability analysis in its judgment order, it did not conduct a
separate analysis regarding a lack of consideration. Further, as noted previously, the
circuit court indicated at trial that the case was limited to the issue of unconscionability.
11
correctness of the circuit court’s ruling on this issue hinges on whether extrinsic evidence
was properly admitted to add to the terms of the written enrollment agreement.
The respondents assert that extrinsic evidence of job guarantees properly
were admitted on three grounds: to show that the written agreement is ambiguous, to
show fraud, and to show a lack of consideration. It has long been our law that
[e]xtrinsic evidence of statements and declarations of the
parties to an unambiguous written contract occurring
contemporaneously with or prior to its execution is
inadmissible to contradict, add to, detract from, vary or
explain the terms of such contract, in the absence of a
showing of illegality, fraud, duress, mistake or insufficiency
of consideration.
Syl. pt. 1, Kanawha Banking & Trust Co. v. Gilbert, 131 W. Va. 88, 46 S.E.2d 225(1947).
First, the respondents contend that the circuit court properly admitted
extrinsic evidence of verbal promises of job placement because the enrollment agreement
is ambiguous. According to the respondents, the enrollment agreement is ambiguous
because it is silent regarding the guarantee of job placement which the respondents posit
is a material term of the agreement.8 Under our law, “[c]ontract language is considered
ambiguous where an agreement’s terms are inconsistent on their face or where the
8
The respondents cite the testimony of a college representative that job placement was
the primary purpose of enrollment at the college.
12
phraseology can support reasonable differences of opinion as to the meaning of words
employed and obligations undertaken.” Syl. pt. 6, State ex rel. Frazier & Oxley v.
Cummings, 212 W. Va. 275, 569 S.E.2d 796 (2002). The respondents failed to show that
the enrollment agreement is inconsistent on its face or that parties can have reasonable
differences in construing the terms of the agreement. Moreover, the fact that the
agreement does not address job placement does not make it ambiguous. Generally, “[a]
contract that is silent as to a point is not ambiguous in that regard; the question presented
by such silence is determination of the effect of the contract rather than interpreting its
language, and the trier of fact may not make such a determination.” 17B C.J.S. Contracts
§ 1052 (2013) (footnote omitted). A guarantee of job placement to college graduates is
not a provision that generally appears in a college enrollment agreement, and its absence
from the agreement at issue did not render the agreement ambiguous. Consequently,
because the enrollment agreement is not ambiguous, extrinsic evidence was not
admissible to aid in its construction.
Second, the respondents contend that extrinsic evidence of a verbal promise
of job placement was admissible below to show fraud. However, the circuit court granted
the college’s motion for judgment as a matter of law on the fraud claim during the trial.
Thus, extrinsic evidence was not admissible to show fraud.
Finally, the respondents aver that extrinsic evidence was admissible to
show a lack of consideration. We disagree. There was no finding below that the written
13
enrollment agreement lacked consideration on its face. Absent such a finding, extrinsic
evidence of additional consideration was not admissible to supplement the terms of the
written enrollment agreement. Therefore, we conclude that the circuit court erred in
ruling that the agreement between the parties was unconscionable based on a lack of
consideration.9
The circuit court also based its lack of consideration determination on
insufficiency of educational services. Specifically, the circuit court determined that the
enrollment agreement was unconscionable because “the agreement . . . was so one-sided
insofar as the [college] received the significant tuition from the [respondents] but
provided no educational . . . services in return.” This Court has not recognized the right of
a college student to bring an action for educational malpractice against a college or
university. While the respondents posit that a finding of lack of consideration based on
insufficient educational services is different from a claim for educational malpractice, we
fail to see the practical distinction in the context of this case. Further, the respondents did
not show that the college failed to provide the educational services set forth in the written
9
With regard to the respondents’ claim of inducement by unconscionable conduct, this
Court has never recognized the existence of such a claim outside of W. Va. Code § 46A­
2-121, which we have found to be inapplicable to the instant facts. Rather, “we have
equated [inducement by unconscionable conduct in W. Va. Code § 46A-2-121] with
fraudulent conduct.” One Valley Bank of Oak Hill v. Bolen, 188 W. Va. 687, 691, 425
S.E.2d 829, 833 (1992) (footnote and citations omitted). As noted above, the circuit court
granted judgment as a matter of law to the college on the respondents’ fraud claim.
14
enrollment agreement. Therefore, we conclude that the circuit court’s finding of a lack of
consideration based on insufficient educational services is error.
3. Equitable Claim for Fraudulent Inducement
Finally, with regard to the respondents’ claim for fraudulent inducement,
the circuit court granted the college’s motion for judgment as a matter of law on the
respondents’ fraudulent inducement claim on the basis that the fraud claim was barred by
the applicable statute of limitation. Nevertheless, the circuit court sent a special
interrogatory to the jury “[o]n the defense of fraudulent inducement” which the jury
answered in the affirmative. The respondents assert in their brief to this Court that their
claim for fraud sought only equitable relief and therefore was subject to laches and not
the statute of limitations.
This Court finds that the circuit court erred to the extent that it granted what
it characterized as equitable relief to the respondents on the basis of fraudulent
inducement. Because the circuit court granted judgment as a matter of law on the
respondents’ fraudulent inducement claim on the basis that the claim was time-barred, the
respondents did not have an equitable claim for fraudulent inducement.10 This Court has
held that “[a] court of equity is without jurisdiction to entertain a suit based on an alleged
10
The respondents filed their complaint against the college approximately five and one-
half years after they graduated from the college.
15
fraudulent misrepresentation to the prejudice of the complaining party, where the sole
relief sought therein is the recovery of damages. In such a case the remedy of the injured
party at law is plain, adequate and complete.” Syl. Pt. 2, Lake O’Woods v. Wilhelm, 126
W. Va. 447, 28 S.E.2d 915 (1944). Moreover, we held in syllabus point 1 of Wilt v. Crim,
87 W. Va. 626, 105 S.E. 812 (1921), that “[e]quity will not entertain a suit to recover
damages for a fraud which amounts to a tort remediable by an action at law for fraud and
deceit.”
The respondents had an adequate remedy at law for fraudulent inducement
based on the alleged misrepresentations of job placement made by college
representatives. This Court has long recognized an action for fraudulent inducement as
follows:
Where one person induces another to enter into a
contract by false representations which he is in a situation to
know, and which it is his duty to know, are untrue, he, in
contemplation of law, does know the statements to be untrue,
and consequently they are held to be fraudulent, and the
person injured has a remedy for the loss sustained by an
action for damages. It is not indispensable to a recovery that
the defendant actually knew them to be false.
Syl. pt. 1, Horton v. Tyree, 104 W. Va. 238, 139 S.E. 737 (1927). However, the circuit
court granted judgment as a matter of law to the college on the respondent’s fraudulent
inducement claim on the basis that the claim was time barred. Having failed to timely
seek their proper legal remedy for damages which was fraudulent inducement, the
respondents cannot now obtain damages for fraudulent inducement simply because the
16
damages are characterized as equitable in nature. Therefore, to the extent that the circuit
court’s award of damages to the respondents was based on a finding of fraudulent
inducement, it is error.11
IV. CONCLUSION
For the foregoing reasons, this Court concludes that the circuit court erred
in granting relief to the respondents and denying the college’s motion for judgment as a
matter of law. Therefore, the July 20, 2011, amended judgment order of the Circuit Court
of Kanawha County is reversed, and this case is remanded for the entry of judgment as a
matter of law in favor of Mountain State College.
Reversed and remanded.
11
In its petition in this Court, the college requested, in the alternative, that this Court
reverse and remand for a new trial, and raised several assignments of error to support this
request. Because we reverse the circuit court’s denial of the college’s motion for
judgment as a matter of law, we do not find it necessary to address these remaining
assignments of error.
17