|
COURT OF APPEALS DECISION DATED AND RELEASED March 19, 1996 |
NOTICE |
|
A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals. See § 808.10 and
Rule 809.62, Stats. |
This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official Reports. |
No. 95-1110
STATE
OF WISCONSIN IN COURT OF
APPEALS
DISTRICT I
ALICIA MARIA
FERNANDEZ,
Plaintiff-Appellant,
v.
MEDICAL COLLEGE OF
WISCONSIN, INC.,
and HERBERT M. SWICK,
Defendants-Respondents.
APPEAL from a judgment
of the circuit court for Milwaukee County:
WILLIAM D. GARDNER, Judge. Affirmed.
Before Wedemeyer, P.J.,
Sullivan and Fine, JJ.
PER
CURIAM. Alicia Maria Fernandez appeals from a judgment dismissing
her complaint against the Medical College of Wisconsin, Inc., and Herbert M.
Swick, and awarding the Medical College $11,167.25 on its counterclaim. Fernandez contends that there are questions
of material fact concerning her claims for defamation and breach of contract
and her claim that her dismissal from medical school was arbitrary and
capricious. She also contends that the
complaint stated a claim for intentional infliction of emotional distress and
that there is no legal bar to her claims for conversion, breach of fiduciary
duty, and fraud. Finally, Fernandez
contends that her breach of contract claim barred summary judgment against her
on the Medical College's counterclaim.
We reject her arguments and affirm the judgment.
Facts
Fernandez was originally
accepted as a student at the Medical College in 1983. After deferring her enrollment for one year, she withdrew during
the first semester. She subsequently
enrolled in, and withdrew from, Mayo Medical College. In 1987, Fernandez reapplied to the Medical College and was
accepted. During the second semester
following her re-admission, Fernandez was admitted to the school's five-year
program. Near the beginning of her
second year, she took a semester leave of absence because of scheduling
problems. She later took an additional leave
of absence for health reasons.
Fernandez returned from this leave in January 1990. She received passing grades (including a low
pass and a high pass) in the courses taken after that date.
In the summer of 1989,
the Medical College's Academic Standing Committee warned Fernandez that it was
concerned with her lack of academic progress and that failure to maintain
satisfactory progress could result in dismissal. Fernandez was advised that she was required to complete the
biochemistry course during the 1989-90 academic year and take the full
sophomore course schedule during 1990-91.
In an October 1990 letter, the Medical College's president advised
Fernandez that she was required to take Part I of the National Board of
Medical Examiners' (NBME) examination in June 1991. Days before the examination was scheduled, the Academic Standing
Committee reiterated the requirement that Fernandez take the June NBME
examination.
The June NBME
examination at the Medical College was cancelled after copies of the examination
were stolen. Swick, the Senior
Associate Dean for Academic Affairs, sent a memo to the students who had been
scheduled to take the examination. The
memo notified them that, because of the cancellation, the school was waiving
its requirements concerning the examination.[1] Students were reminded that passing the
examination was necessary for licensing, and they were encouraged to take the
examination in September. Fernandez
received a copy of the memo. She did
not contact Swick or the Academic Standing Committee to ascertain if it applied
to her, and she did not take the September examination.
In December 1991, the
Academic Standing Committee met and reviewed Fernandez's status. According to the minutes of the meeting, the
Committee voted “to dismiss” Fernandez for failure to satisfy previous mandates
and for unsatisfactory professional behavior.
Fernandez received notice that the committee “voted to conduct a
dismissal hearing, to consider [her] dismissal” for a “pattern of conduct that
indicates that [she was] not suited for the practice of medicine.” The conduct identified in the notice was
the failure to take the NBME examination as previously directed; a pattern of
not taking other examinations in a timely fashion, if at all;[2]
and repeated leaves for personal and academic reasons. The notice also provided that the committee
would consider any other grounds that may be discovered. The hearing was set for January 13, 1992,
although it was later postponed to January 23.
Prior to the hearing,
the Academic Standing Committee notified Fernandez that it would also consider
dismissal for unethical conduct; i.e., a long‑standing pattern of
dishonesty. The identified incidents,
dating from September 1990, were misrepresentations regarding the reason for
default on a student loan, disbursement of loan proceeds, the reason for not
taking the September NBME examination, and the purpose of an emergency
loan. The notice also alleged that a
representation in a health insurance application was contrary to information
previously provided to the Medical College's employees. Fernandez was later notified that
allegations regarding false pledges during an alumni “phonathon” would also be
considered, as well as an allegation that she had misrepresented the facts
regarding payment of her car loan.
At Fernandez's request,
an Ad Hoc Hearing Committee was convened to consider the various allegations of
dishonesty. Three members of the Ad Hoc
Hearing Committee were also members of the Academic Standing Committee.
A joint hearing was
held, at which Fernandez appeared with counsel. While Fernandez was personally allowed to call witnesses and
cross-examine adverse witnesses, her attorney's participation was limited to
making opening and closing statements and advising her during the
proceedings. The hearing was tape
recorded. In addition to documentary
evidence and several witnesses, Swick summarized comments and statements from
employees and complainants who were not present.
After the hearing, the
Ad Hoc Hearing Committee met and found against Fernandez on the allegations
concerning the insurance application, the alumni pledges, and the misrepresentations
regarding disbursement of loan proceeds and payment on the car loan. The Academic Standing Committee, of which
Swick was a member, then met. The
Committee considered the Ad Hoc Hearing Committee's dishonesty findings to be
relevant to Fernandez's credibility. It
found that Fernandez was dishonest regarding her inability to remember writing
a letter to the NBME. The committee
also found that she repeatedly failed to demonstrate the expected level of
professional responsibility by not taking examinations timely, by not accepting
responsibility for her actions, and by disregarding specific mandates
concerning the NBME examination without clarifying whether Swick's memo applied
to her. Both committees concluded that
Fernandez should be immediately discharged.
An appeals subcommittee of the faculty rejected Fernandez's claims that
the dismissal votes were unfair, incorrect applications of policies, or
arbitrary and capricious actions.
Fernandez filed suit
against the Medical College and Swick.
She alleged claims of defamation and intentional infliction of emotional
harm against both the Medical College and Swick.[3] She also alleges claims against the Medical
College for breach of contract, arbitrary and capricious action, conversion of
student loan money, breach of fiduciary duty, and fraud. The Medical College filed a counterclaim. It sought indemnification for its payment of
a student loan it had guaranteed for Fernandez. The trial court granted the summary judgment motions filed by the
Medical College and Swick. Additional
facts will be set forth in the opinion as relevant.
Standard of
Review
This court will reverse
a trial court's decision granting summary judgment only if the trial court
incorrectly decided a legal issue or if material facts are in dispute. Hammer v. Hammer, 142 Wis.2d
257, 263, 418 N.W.2d 23, 25 (Ct. App. 1987).
All doubts on factual matters are resolved against the party moving for
summary judgment, Grams v. Boss, 97 Wis.2d 332, 338-39, 294
N.W.2d 473, 477 (1980), and even on undisputed facts, summary judgment is not
appropriate if reasonable persons can reach different inferences, Delmore
v. American Family Mut. Ins. Co., 118 Wis.2d 510, 516, 348 N.W.2d 151,
154 (1984).
Appellate courts and
trial courts follow the same methodology.
Green Spring Farms v. Kersten, 136 Wis.2d 304, 315, 401
N.W.2d 816, 820 (1987). First, the
pleadings are examined to determine whether the complaint states a claim for
relief. Id. If the complaint states a claim and the
answer joins the issue, the court then examines the pleadings, depositions,
answers to interrogatories, admissions on file, and affidavits, if any. Id. If the summary judgment materials do not indicate that there is a
material issue of fact and if the moving party is entitled to judgment as a
matter of law, summary judgment must be entered. Section 802.08(2), Stats.
Defamation Claim
The trial court
concluded that the charges and statements made against Fernandez during the
dismissal hearing were capable of defamatory meaning. The court held, however, that the statements were privileged
because the statements furthered the faculty's common interest in the academic
and ethical qualifications of a medical student. The court also held that Fernandez had not presented sufficient
facts to show an abuse of privilege.
Fernandez concedes that
a conditional privilege existed. She
contends that whether the privilege was abused presents a question of material
fact. She argues that the evidentiary
materials present sufficient facts from which a reasonable jury could infer
that Swick and the Medical College acted in bad faith. To support her defamation claim, she cites
to the following allegations drawn from the evidentiary materials:
1. Swick maintained a
non-academic file for her;
2. A Medical
College employee inquired of a creditor about the status of Fernandez's car
loan after introducing herself as Fernandez's “financial consultant”;
3. Swick ordered
that a subsequent telephone conversation with the creditor be recorded;
4. Swick refused
to acknowledge that his memo regarding the NBME examination could mislead her
into believing she was not required to take the September examination;
5. The Academic
Standing Committee's minutes reflect that the committee voted to dismiss
Fernandez before a hearing was held;
6. Swick had
discussed with an investigator the possibility that Fernandez stole the June
NBME examination, and Swick later told the investigator that she was dismissed
under adverse circumstances;
7. Fernandez's only
poor grade was received in a class taught by Swick and for which tests were not
administered;
8. Swick's
investigation of the allegations of dishonesty did not include speaking with
Fernandez, the insurance agent who took the health insurance application, one
of the doctors who disavowed a “phonathon” pledge, or the employee to whom
Fernandez allegedly misrepresented the use of loan proceeds;
9. The Medical
College withheld part of her student loan in January 1992 by overstating
tuition and violating its policy of applying only one-half of loan proceeds to
tuition;
10. Although he lacked
authority over student loan disbursements, Swick offered to release additional
student loan funds in January 1992 if Fernandez provided information about her financial
obligations, an offer which Fernandez refused;
11. Fernandez was denied
the opportunity to copy materials from her file prior to the dismissal hearing;
12. The Medical College
relied upon incidents that had been resolved several months before the
initiation of dismissal proceedings;
13. Swick apparently met
ex parte with the chair of the appeals subcommittee to provide
additional, undisclosed information about the appeal; and
14. Swick violated the
Medical College's rules of medical confidentiality by contacting a physician at
the Student Health Center and obtaining medical information without Fernandez's
permission.
The
Medical College and Swick dispute several of Fernandez's allegations. For purposes of determining whether a party
has defeated a motion for summary judgment, however, we assume the allegations
to be true. See Grams,
97 Wis.2d at 338-39, 294 N.W.2d at 477.
A conditional privilege
to publish defamatory matter exists if the person publishing the information
and the recipient of the information have a legitimate common interest. Zinda v. Louisiana Pacific Corp.,
149 Wis.2d 913, 922, 440 N.W.2d 548, 552 (1989). The privilege may be lost, however, if it is abused. Id. at 924, 440 N.W.2d at
553. The Restatement 2d of Torts identifies five situations which may
present an abuse of a conditional privilege, and the Wisconsin Supreme Court
has endorsed its formulation. Id.
at 924-25, 440 N.W.2d at 553. Abuse
occurs (1) if the defendant knew the defamatory matter was false or he or
she acts in reckless disregard of its truth or falsity, (2) if the
defamatory matter is published for a purpose other than that for which the
privilege is given, (3) if the statement is published to someone not
necessary to the accomplishment of the privilege, (4) if the publication
includes defamatory material not reasonably relevant to the purpose of the
privilege, and (5) if the publication includes non-privileged material as
well as privileged material. Id.
If the publisher of the
defamatory matter is motivated solely by spite or ill will, the publication is
for a non-privileged purpose, and the privilege is abused. Ranous v. Hughes, 30 Wis.2d
452, 469, 141 N.W.2d 251, 259 (1966).
When the publication is made to protect the common interest, however,
the fact that the publisher is also motivated by resentment or indignation does
not destroy the privilege. Id. Thus, if the primary purpose of the
publication is to promote a common interest, a defendant's secondary motive
does not defeat the privilege. W. Page Keeton et al., Prosser and Keeton
on the Law of Torts, § 115, at 833-34 (5th ed. 1984).
The student handbook of
the Medical College indicated that the requirements for a degree included
competence in assuming responsibility for patient care and evidence of good
judgment and integrity. It also warned
that a student may be dismissed if judged to be unsuited to enter the
profession for reasons of conduct, behavior, ethics, or quality of work. The Academic Standing Committee was expected
to consider all available information to assess a student's intellectual
ability, motivation, and personality before declaring a student unsuited to
continue in medical school.
The information
presented to the Academic Standing Committee and the Ad Hoc Hearing Committee
was highly relevant to the common interest of the Medical College faculty of
which Swick and the committees' members were a part. Even assuming Fernandez's allegations are true, they are not
sufficient to show that promotion of the common interest was not the primary
motivation for the publication of the defamatory matters during the hearing.
Intentional
Infliction of Emotional Distress
The trial court
dismissed the third claim in Fernandez's complaint, concluding that it failed
to state a claim for intentional infliction of emotional distress. The trial court held that because Fernandez
did not allege that the anxiety, emotional trauma, and mental anguish she claimed
to have suffered were “disabling,” the pleading was inadequate.
Fernandez contends that
the trial court erred because the notice pleading provision of § 802.02, Stats., does not require such precise
pleading. Further, she contends that a
fair inference from the terminology used is that the emotional distress was
extreme and disabling. She argues that
the allegations upon which she relied to argue that Swick and the Medical
College abused the conditional privilege to publish defamatory matters also create
a fact issue as to whether their conduct was extreme and outrageous and
intended to cause emotional distress.
The first step in the
summary judgment methodology is to determine if the complaint states a claim
for relief. Green Spring Farms,
136 Wis.2d at 315, 401 N.W.2d at 820.
The following is a summary of the factual allegations in the
complaint. Swick advised Fernandez that
the Academic Standing Committee would conduct a dismissal hearing based on a
pattern of conduct indicating that she was “not suited for the practice of
medicine.” She was advised of the
details of the claimed pattern of conduct and of the procedures for the
hearing. Swick instructed another
employee to contact her creditor and obtain information about a debt by
claiming to be Fernandez's “financial consultant.” As a result of this contact, the employee obtained personal and
confidential financial information about Fernandez which was used to her
detriment in the dismissal proceedings.
During the dismissal hearings, the procedures contained in Fernandez's
contract with the Medical College were not followed, and Swick acted as both
witness and prosecutor. The committees'
dismissal decisions were upheld on appeal.
Further, the Medical College wrongfully withheld $623 of student loan
proceeds by overstating tuition. With
regard to the third claim, the complaint specifically alleged that they
intended to and did “inflict emotional harm upon” her and, as a result, she
“experienced extreme anxiety, emotional trauma, and mental anguish.”
A claim for intentional
infliction of emotional distress was recognized in Alsteen v. Gehl,
21 Wis.2d 349, 124 N.W.2d 312 (1963).
The Alsteen court concluded that “[o]ne who by extreme and
outrageous conduct intentionally causes severe emotional distress to another is
subject to liability for such emotional distress and for bodily harm resulting
from it.” Id. at 358, 124
N.W.2d at 317 (emphasis in original omitted).
To recover, a plaintiff must show that the defendant intends for his or
her behavior to cause emotional harm. Id.
at 359, 124 N.W.2d at 318. The
plaintiff must also establish that the conduct was extreme and outrageous;
i.e., “a complete denial of the plaintiff's dignity as a person.” Id. at 359-60, 124 N.W.2d at
318. Additionally, the plaintiff must
show that he or she suffered an extreme disabling emotional response to the
conduct and that the conduct was the cause of the response. Id. at 360, 124 N.W.2d at
318. To be severe emotional distress,
plaintiff's emotional response to the defendant's actions must leave him or her
unable to function in other relationships: temporary discomfort is not
sufficient. Id. at
360-61, 124 N.W.2d at 318.
For purposes of
determining if the complaint states a claim for intentional infliction of
emotional distress, the case law suggests that the factual allegations
sufficiently allege that Fernandez suffered an extreme disabling emotional
response. See Slawek v.
Stroh, 62 Wis.2d 295, 314-16, 215 N.W.2d 9, 20-21 (1974) (defendant's
counterclaim alleged plaintiff's acts caused “great mental anguish, suffering
and humiliation” and defendant was “held up to ridicule, shame, contempt and
embarrassment”). The complaint does
not, however, allege conduct that is so extreme and outrageous that the average
member of the community must regard it as being a “complete denial of the
plaintiff's dignity as a person.” As a
matter of law, the conduct alleged does not state a claim for intentional
infliction of emotional distress.
Breach of
Contract Claim
Fernandez contends the
Medical College violated the hearing procedures and, by doing so, breached the
contract created by its student handbook.
She also contends that the Medical College violated the duty of good
faith implied in the contract. To
support the breach-of-contract claim, Fernandez cites the minutes of the
Academic Standing Committee's meeting held before the hearing, which reflect
that the committee voted “to dismiss” her.
She also cites late notice of an allegation, limited access to documents
in her file, and the Medical College's provision of an incomplete witness
list. Additionally, she objects to the
limited role imposed upon her attorney and to Swick's presentation of hearsay
statements to support some allegations.
She argues that although issues regarding dishonesty were to be considered
by the Ad Hoc Hearing Committee, the Academic Standing Committee considered
allegations of misconduct in its decision, including an incident of which she
was not given prior notice. Fernandez
also alleges that the procedures of the appeals subcommittee were violated when
Swick apparently held an ex parte meeting with the chair of the
subcommittee to provide “further background” about the case and when he
attended the subcommittee's hearing, although he was not designated to
represent the Academic Standing Committee.
To support her bad faith claim, Fernandez relies on the items enumerated
in the discussion of defamation.
Wisconsin has recognized
that a college's bulletin and student handbook can create a contractual
relationship between the student and the college. Cosio v. Medical College of Wisconsin, Inc., 139
Wis.2d 241, 245, 407 N.W.2d 302, 304 (Ct. App. 1987). We are not persuaded, however, that the traditional rules of
contract construction should apply when the underlying issue is dismissal for
academic shortcomings. Schools are
educational institutions, and a decision to dismiss for academic reasons rests
on the school officials and faculty's subjective judgment that a student lacks
the necessary ability to perform at expected levels. Board of Curators v. Horowitz, 435 U.S. 78, 88-90
(1978). The decision is a collective
evaluation of cumulative information that is not readily subjected to the
adversary process. Id. at
90. Courts are not qualified to pass
upon the academic qualifications of students.
See Mahavongsanan v. Hall, 529 F.2d 448, 450 (5th Cir.
1976), aff'd, 579 F.2d 245 (5th Cir. 1978) (per curiam). Absent a voluntary undertaking, even
procedural due process does not mandate that a student in a public institution
receive a hearing when dismissed for academic reasons. Horowitz, 435 U.S. at 90. Thus, educational contracts are unique and
should be construed to allow the school the greatest flexibility in meeting its
educational responsibility. See Jansen
v. Emory University, 440 F.Supp. 1060, 1062 (N.D. Ga. 1977), aff'd,
579 F.2d 45 (5th Cir. 1978) (per curiam).
Considered in light of
the need for flexibility in interpretation of educational contracts, Fernandez's
breach-of-contract claim does not withstand the summary judgment motion. The procedures for academic dismissal by the
Academic Standing Committee and the appeals subcommittee were published in the
student handbook. Additionally, a year
prior to the allegations against Fernandez, the Medical College had adopted
policies and procedures for hearing charges of academic misconduct by an Ad Hoc
Hearing Committee.
The Academic Standing
Committee's procedures provided that a hearing would be held between five and
fifteen days after the student was given notice of the charges. The procedures allowed for representation by
legal counsel, allowed the student advance access to the file pertaining to the
case, and provided the student a right to present and to confront
witnesses. The chairperson's rulings on
questions of procedure and admissibility of evidence would be conclusive.
The procedures for
hearing charges of dishonest, unethical, or irresponsible behavior by an Ad Hoc
Hearing Committee provided that dismissal could only occur after a formal
hearing. The Senior Associate Dean for
Academic Affairs was responsible for presenting the charges and the evidence to
the committee. The student had the
right to appear, to present evidence and witnesses, to question witnesses, and
to make statements to the committee.
Both the student and the Senior Associate Dean could utilize legal
counsel, but neither counsel could question witnesses.
Although the meeting
minutes suggest a premature vote to dismiss rather than a vote to hold a
hearing, we consider the alleged breach inconsequential because Fernandez was
accorded a hearing on all charges. The
initial notice also warned that the committee would consider any additional matters
that later came to their attention.
This language was sufficient to apprise Fernandez that additional
allegations could be added when discovered, whether two days before, or
immediately prior to, the hearing. Last
minute allegations also present the possibility of additional witnesses. The additional objections Fernandez raises
regarding the hearing procedures, i.e, denial of counsel's right to question
witnesses, presentation of hearsay statements, and limited access to her file,
were consistent with or at least not in direct conflict with the published
procedures.
The procedures for the
appeals subcommittee provided that the issues for appeal from the Academic
Standing Committee were limited to whether there had been an unfair or
incorrect application of the Medical College's policies regarding student
performance or whether the dismissal decision was arbitrary and
capricious. The appeals subcommittee is
confined to considering the committee's report and any statements by the
student and/or legal counsel. Also, a
representative of the committee or its counsel could appear to explain the
basis for the decision. The hearing
before the appeals subcommittee is closed, and the only persons permitted to
attend were members of the subcommittee, the student, his or her faculty
advisor and/or legal counsel, a representative of the Academic Standing
Committee and/or its counsel, and the person recording the proceedings. The policies and procedures of the Ad Hoc
Hearing Committee provided that appeal was allowed only in the event of
dismissal, and the standard appeal mechanism applied.
Swick's ex parte
communication of background information to the chairperson of the appeals
subcommittee would clearly be a violation of this procedure. The summary judgment materials, however,
provide no evidence that this occurred.
A letter purporting to schedule a meeting is not evidence that the
meeting was actually held. We see no
reason to presume that the chairperson would consent to or attend a meeting
that would violate procedures, and Fernandez has not provided any authority
requiring this court to do so. Even
interpreted in the light most favorable to Fernandez, the letter is only
evidence that Swick attempted an ex parte communication.
Similarly, Fernandez
argues that Swick attended the appeals subcommittee hearing in violation of the
appeals subcommittee's procedures.
Although she alleges that his attendance was unauthorized, she does not
present any evidentiary materials to show he actively participated in the
hearing. We are not willing to conclude
that mere attendance, without more, is so contrary to the appeals
subcommittee's procedures as to constitute a material breach of contract.
Dismissal Was
Arbitrary and Capricious
In her argument that the
decision to dismiss her was arbitrary and capricious, Fernandez again raises
the factual allegations made to support her defamation and breach-of-contract
claims. Clearly, what she wants is for
the trial court to litigate the correctness of the committees' decisions. In her appellate brief, concerning the four
charges which the Ad Hoc Hearing Committee found to be supported by the
evidence, she states, “Whether the remaining charges, as to which Ms. Fernandez
was found guilty in violation of [the Medical College's] professional ethics
policy, constitute sufficient reasons for dismissal, should be a matter-of-fact
[sic] finding to be left to a jury ....”
The test of whether an
academic dismissal is arbitrary and capricious is whether a school lacks a
sufficient reason for the dismissal. Cosio,
139 Wis.2d at 247, 407 N.W.2d at 305.
If a school has a sufficient reason, a court will not interfere with the
decision. Id.
The Ad Hoc Hearing
Committee found that Fernandez had engaged in a pattern of dishonesty, and the
Academic Standing Committee found that she failed to demonstrate the expected
level of professional responsibility, failed to accept responsibility for her
actions, and disregarded mandates. In
light of the committees' findings, we cannot say that the Medical College
lacked a sufficient reason for the dismissal.
Fernandez is not entitled to have a jury second-guess the school's
committees.
Claims for
Conversion and Breach of Fiduciary Duty
After the dismissal
proceedings were initiated, the Medical College received proceeds from a student
loan for Fernandez in the amount of $5,520.
The school applied $500 to repay an emergency loan from the Medical
College, applied $4,820 to pay tuition, and disbursed $200 to Fernandez. Tuition was actually $4,197. Fernandez contends that the Medical College's
retention of the $623, which was the amount she was overcharged for tuition,
provides a basis for claims of conversion and breach of fiduciary duty. Fernandez contends that federal student aid
regulations prohibited the Medical College from withholding the $623 without
her written consent.
The trial court
concluded that Fernandez's claim for improper retention of loan monies was
based on 34 C.F.R. § 682.604, which governs loan disbursements. The trial court concluded, however, that
neither the Higher Education Act of 1965 nor its implementing regulations
create a private right of action.
Therefore, the complaint failed to state a claim regarding the
withholding of the $623.
Fernandez does not
contend that the federal legislation or regulations create a private cause of
action. She contends, however, that
this conclusion does not prohibit or limit her right to seek recovery under
state law for claims of conversion or breach of fiduciary duty.
The difficulty with
Fernandez's argument is that she has provided no authority, except the federal
statute and regulations, for her argument that she had an unqualified right to
the $623 that the Medical College withheld and that the Medical College was a
fiduciary with respect to the loan proceeds.
If the statute and regulations do not provide a private action, they can
not be relied upon to provide the missing authority. The record does not contain copies of the loan documents. Consequently, there is nothing in the record
to support a conclusion that she was unconditionally entitled to the $623 or
that the Medical College held the funds in trust for her. The trial court properly granted the Medical
College summary judgment on the claims of conversion and breach of fiduciary
duty.
Fraud
Claim
Fernandez's fraud claim
is based on the statement of the amount of tuition shown on the receipt for the
student loan proceeds. The trial court
rejected the claim, relying on its conclusion that the federal legislation and
regulations do not create a private right of action. Fernandez contends that a state law claim for fraud (or
intentional misrepresentation) is not barred.
A claim of intentional
misrepresentation requires a showing that the defendant knowingly or recklessly
made a false representation of fact and that a defendant intended to deceive
the plaintiff and to induce the plaintiff to act on the deception to his or her
pecuniary loss. Ollerman v.
O'Rourke Co., 94 Wis.2d 17, 25, 288 N.W.2d 95, 99 (1980). Moreover, the plaintiff must have believed
the misrepresentation and relied upon it to his or her detriment. Id.
The summary judgment
materials establish that Fernandez does not have a claim for intentional
misrepresentation. It is undisputed
that she knew that the amount of the tuition reflected on the receipt was
incorrect and that she made numerous demands for release of the $623. Fernandez neither believed nor detrimentally
relied upon the misrepresentation.
Challenge to
Judgment on Guaranty
Fernandez does not
contest that the Medical College guaranteed a loan she obtained from M&I
Bank, that she defaulted on the loan, or that the Medical College honored its
guaranty and paid the bank. She
contends that her inability to perform her contract with M&I Bank was
caused by the breach of contract committed by the Medical College when it
dismissed her. She argues that the
Medical College's breach of contract bars its equitable subrogation right to
recover the amounts it paid under the guaranty. We have concluded, however, that Fernandez's breach-of-contract
claim was properly dismissed.
Therefore, Fernandez has no defense to the Medical College counterclaim,
and the trial court's grant of summary judgment was proper.
By the Court.—Judgment
affirmed.
This opinion will not be
published. See Rule 809.23(1)(b)5, Stats.
[1] The Medical College required all students to take Part I of the NBME examinations in June of their sophomore year. Students who failed the examination were permitted to begin the junior year rotations, provided they took the examination again the following September. Failure to take and pass the September examination would preclude the student from further course work until he or she passed the examination. According to Swick's memo, the Medical College also waived this requirement for students who had previously failed the NBME examination.
[2] Fernandez had previously received an incomplete on a pathology course when she missed the final examination and two scheduled make-up tests. She ultimately took a special make-up examination and passed the course. Fernandez also missed two examinations in the biochemistry course, which she had not been required to make up.