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Bosch v. Northshore University Health System

Court of Appeals of Illinois, First District, Third Division

December 11, 2019

BRANDON BOSCH, Plaintiff-Appellant,
v.
NORTHSHORE UNIVERSITY HEALTH SYSTEM, an Illinois-Not-for-Profit Corporation; DePAUL UNIVERSITY, an Illinois Private University; TRACY FELT; and JULIA FEZCKO, Defendants-Appellees.

          Appeal from the Circuit Court of Cook County 17 L 6658 Honorable Margaret Brennan, Judge Presiding

          Attorneys for Appellant: Joseph P. Selbka, of Pluymert, MacDonald, Hargrove & Lee, Ltd., of Hoffman Estates, for appellant.

          Attorneys for Appellee: Jason A. Parson, Luisa F. Trujillo, and Christopher C. Heery, of Anderson, Rasor & Partners, LLP, of Chicago, for appellees NorthShore University Health System, Tracey Felt, and Julia Feczko. Scott L. Warner and Karen L. Courtheoux, of Husch Blackwell LLP, of Chicago, for other appellee.

          PRESIDING JUSTICE ELLIS delivered the judgment of the court, with opinion. Justices Howse and Cobbs concurred in the judgment and opinion.

          OPINION

          ELLIS PRESIDING JUSTICE

         ¶ 1 Plaintiff Brandon Bosch was dismissed from a school for nurse anesthetists run by NorthShore University Health System (NorthShore) and DePaul University (DePaul). He sued, claiming that NorthShore and DePaul breached an implied contract when they dismissed him for "wholly invented" reasons. He also pleaded claims for breach of contract based on third-party beneficiary status as well as counts sounding in fraud and spoliation of evidence. He added a claim of tortious interference against the two clinical instructors who allegedly fabricated the charges against him.

         ¶ 2 The circuit court dismissed each claim with prejudice. We affirm the trial court's judgment in all respects but one. We hold that Bosch stated a claim for breach of an implied contract with both NorthShore and DePaul. While the trial court was understandably reluctant to wade into matters of academic judgment for which courts have long considered themselves ill suited, this case, as pleaded, is not about the school's academic judgment. It's about fabricating charges against a student the instructors didn't like, to run him out of the school on the eve of his graduation. Bold and difficult to prove as they may be, these allegations, if true, would state a claim for breach of an implied contract.

         ¶ 3 To that extent and only that extent, we reverse the trial court's judgment and remand for further proceedings.

         ¶ 4 BACKGROUND

         ¶ 5 We take the following facts from Bosch's second amended complaint, which we accept as true at the pleading stage. Kramer v. Szczepaniak, 2018 IL App (1st) 171411, ¶ 22.

         ¶ 6 The complaint alleges that NorthShore and DePaul jointly run the NorthShore School of Nurse Anesthesia (School). Its program trains students to become nurse anesthetists. It consists of two parts: a classroom component administered by DePaul and clinical instruction administered by NorthShore.

         ¶ 7 If a student successfully completes the program, NorthShore will provide a certificate of completion of the training required to be a nurse anesthetist. If the student is also a degree-seeking student, DePaul would confer a master's degree in nursing. DePaul will not grant the degree unless the student completes the clinical instruction provided by NorthShore. The program is accredited as the "NorthShore University HealthSystem School of Nurse Anesthesia, DePaul University."

         ¶ 8 In 2010, Bosch enrolled in the School. He successfully completed all clinical and classroom instruction from September 2010 to July 2012. In July, he began his final course, Practicum III. Defendants Tracy Felt and Julia Feczko were the preceptors-the clinical instructors-for Practicum III. Bosch claims that due to a "personality conflict," Felt and Feczko "began manufacturing reasons to discipline Plaintiff and eventually have [him] dismissed from the program."[1]

         ¶ 9 On July 26, Bosch was placed on probation for alleged problems in Practicum III. In accordance with the program's student handbook, Bosch received a notice detailing the reasons he was being placed on probation. The notice stated that Bosch (1) failed to prepare routine anesthesia equipment, (2) failed to correlate anesthetic requirements with monitored parameters and surgical events, (3) required frequent reminders to provide routine equipment, (4) failed to manage intra-operative problems, (5) failed to comply with the controlled substance policy, (6) was disorganized in setting up for cases, (7) failed to anticipate progress of cases, (8) was unable to multitask, and (9) was unable to think critically and solve problems during case management.

         ¶ 10 While he was on probation, Felt and Feczko continued to treat Bosch with hostility and "continued to use false and arbitrary, or subjective but distorted reasons" to fail him. A month later, in August, Bosch met with the directors of the program to discuss his probation. At this meeting, Bosch claims the School was unwilling to entertain the idea that Felt and Feczko's criticisms were illegitimate. After this initial meeting, the School continued Bosch's probation for another 30 days. At the end of the continued probation, as a result of Felt and Feczko's "misrepresentations and misimpressions of Plaintiff s performance," Bosch was told to withdraw from the program or be dismissed.

         ¶ 11 Bosch's second amended complaint contains the following claims: breach of implied tuition contract against NorthShore and DePaul (Counts 1 and 3); third-party beneficiary breach of contract against NorthShore and DePaul (Counts 2 and 4); breach of implied contract (agency theory) against DePaul (Count 5); fraud against NorthShore and DePaul (Count 6); intentional interference with contractual relationship against Felt and Feczko (Count 7); and spoliation of evidence against NorthShore and DePaul (Count 8). Counts 6 and 8 were included solely to preserve them for appeal.[2]

         ¶ 12 Bosch alleges that on July 17, 2019, just before Bosch was placed on probation, Felt and Feczko made false accusations against him. Specifically, Felt "wrongly accused Plaintiff of not having suction available at a patient's bedside during intubation," and Feczko "falsely accused Plaintiff of a serious violation of narcotics policy for a small paperwork error." He claims that the probation notices contain numerous false allegations and "grossly" distorted the facts which led to his probation and dismissal. He directly refutes each of the claimed deficiencies by alleging that:

"a. [Felt and Feczko] wholly invented the incident on July 17, 2012 regarding Plaintiff allegedly not having suction available for a patient during intubation.
b. [Felt and Feczko] wholly invented the claim that Plaintiff failed to prepare routine anesthesia equipment;
c. [Felt and Feczko] wholly invented the claim that Plaintiff failed to correlate anesthetic requirements with monitored parameters and surgical events;
d. [Felt and Feczko] wholly invented the claim that Plaintiff required frequent reminders to provide routine equipment;
e. [Felt and Feczko] wholly invented the claim that Plaintiff failed to properly manage intra-operative problems;
f. [Felt and Feczko] grossly distorted Plaintiff's performance in claiming Plaintiff was disorganized;
g. [Felt and Feczko] grossly distorted Plaintiffs performance in claiming Plaintiff failed to anticipate progress of cases;
h. [Felt and Feczko] grossly distorted Plaintiffs performance in claiming Plaintiff was unable to think critically and solve problems during case management;
i. [Felt and Feczko] grossly distorted Plaintiffs performance in claiming Plaintiff was unable to multitask; and
j. [Felt and Feczko] wrongly accused Plaintiff of violating narcotics policy."

         ¶ 13 The distortions alleged above were so serious and so wildly departed from Plaintiffs actual performance as to amount to misrepresentations. The complaint also alleges that other students with similar skill sets and performance were not expelled or put on probation.

         ¶ 14 As for the contract claims, Bosch alleges that Felt and Feczko's behavior, and his subsequent dismissal, breached the implied contract to provide him an education. Finally, he pleaded that NorthShore and DePaul have either an agency relationship or are engaged in a joint venture, such that DePaul can be held liable for the actions of Felt and Feczko-both of whom were employed by NorthShore.

         ¶ 15 The trial court ruled that Bosch's contract claims fell into the category of nonjusticiable academic decisions. The court likewise dismissed the claim for tortious interference and again dismissed the fraud and spoliation claims. Bosch timely appealed.

         ¶ 16 ANALYSIS

         ¶ 17 Bosch says the court erred by granting defendants' section 2-615 motions to dismiss. A section 2-615 motion tests the legal sufficiency of the complaint based on defects on its face. O'Callaghan v. Satherlie, 2015 IL App (1st) 142152, ¶ 18. Attached exhibits are part of the complaint and must be considered when determining whether the complaint is defective. Kirchner v. Greene, 294 Ill.App.3d 672, 678 (1998). The court must take as true all well-pleaded facts in the complaint and accept all reasonable inferences that may be drawn from those facts. Schweihs v. Chase Home Finance, LLC, 2016 IL 120041, ¶ 27. We review an order of dismissal de novo. Kramer, 2018 IL App (1st) 171411, ¶ 22.

         ¶ 18 I

         ¶ 19 One way in which Bosch seeks to hold defendants liable in contract is by claiming that the School had a contract with the body that provides it accreditation, the Council on Accreditation of Nurse Anesthesia Educational Programs (the Council). Bosch claims that he is a third-party beneficiary of that alleged contract. We agree with the trial court that these counts fail to state a claim.

         ¶ 20 The U.S. Department of Education (DOE) does not accredit schools directly but grants authority to private entities to do so. The Council is a nongovernmental accrediting body that claims to have been recognized since 1975 by the DOE. Among other things, accreditation by a DOE-approved body makes a school eligible for certain federal funding, and its students eligible for federal student loan programs. (There appear to be other benefits as well, such as the ability of students to transfer credits between accredited schools.) The accrediting agency sets standards for accreditation-some quite specific, many more general and aspirational. A school applies for accreditation in part surely for reputational purposes but also because it" 'want[s] a key that would unlock the federal Treasury.'" Sojourner-Douglass College v. Middle States Ass'n of Colleges & Schools, No. ELH-15-01926, 2015 WL 5091994, at *42-43 (D. Md. Aug. 27, 2015) (quoting Chicago School of Automatic Transmissions, Inc. v. Accreditation Alliance of Career Schools & Colleges, 44 F.3d 447, 449 (7th Cir. 1994)).

         ¶ 21 An accrediting body, then, is much like a traditional administrative agency," 'a proxy for the federal department whose spigot it opens and closes.'" Id. (quoting Chicago School, 44 F.3d at 449). It can change its standards at any time, unilaterally. It can change its accreditation decision regarding a particular school at will, too. See Chicago School, 44 F.3d at 449. The relationship between accrediting body and school is thus not one of contract; it is more akin to that of a licensing body to an entity it regulates:

"[Accrediting bodies are not engaged in commercial transactions for which state-law contract principles are natural matches. The 'contract' the School wants to enforce is not a bargained-for exchange but a set of rules developed by an entity with many of the attributes of an administrative agency. Accreditation groups adopt and change their rules unilaterally; by posting an application fee a trade school cannot lock in a favorable set of rules." Id.

         ¶ 22 For that reason, courts have consistently refused to apply contract law to actions involving accreditation disputes. See, e.g., id.; Professional Massage Training Center, Inc. v. Accreditation Alliance of Career Schools & Colleges, 781 F.3d 161, 181 (4th Cir. 2015) ("The Standards of Accreditation do not constitute a binding contract between the [accreditor] and the accredited educational institutions because the [accreditor] can alter the alleged 'contract' at will and, thus, is not bound by its terms."); Foundation For Interior Design Educational Research v. Savannah College of Art & Design, 244 F.3d 521, 532-33 (6th Cir. 2001) (foundation's decision to deny accreditation to college was not actionable in breach of contract); Tsamota Certification Ltd. v. ANSI ASQ National Accreditation Board LLC, No. 17-CV-839-JPS, 2018 WL 1936840, at * 7 (E.D. Wis. Apr. 24, 2018) (board's accreditation determination "was not a relationship of mutual assent to bilateral promises. Rather, [the board] alone controlled the process and could change its rules at any time without input from [the school]," and thus school's "remedy is not in a breach of contract action").

         ¶ 23 And because there is no contract between a school and an accrediting body, there obviously can be no third-party beneficiary to a nonexistent contract. See, e.g., Castrillon v. St. Vincent Hospital & Health Care Center, Inc., 51 F.Supp.3d 828, 842-43 (S.D. Ind. 2014) (plaintiff doctor was not third-party beneficiary of accreditation agreement between defendant hospital and its accreditor, as plaintiff could not identify enforceable contract between those entities); Dr. Erik Natkin, DO PC v. American Osteopathic Ass'n, No. 3:16-CV-01494-SB, 2019 WL 1763242, at *12 (D. Or. Apr. 22, 2019) (medical student was not third-party beneficiary of accreditation agreement between institution and accrediting body).

         ¶ 24 The third-party beneficiary claims in counts 2 and 4 were properly dismissed.

         ¶ 25 II

         ¶ 26 Bosch also alleges the breach of a direct contract with the School-an implied contract to provide him an education and a degree. He cites case law recognizing implied-contract actions in the private education setting, as well as written promises contained in either the School's student ...


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