Taylor v. Converse College

THIS OPINION HAS NO PRECEDENTIAL VALUE. IT SHOULD NOT BE
CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING
EXCEPT AS PROVIDED BY RULE 268(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA
In The Court of Appeals

Melanie Taylor, Appellant,

v.

Converse College, Respondent.

Appellate Case No. 2011-197947

Appeal From Spartanburg County
J. Derham Cole, Circuit Court Judge

Unpublished Opinion No. 2012-UP-601
Submitted October 1, 2012 – Filed November 7, 2012

AFFIRMED

Nancy Bloodgood and Lucy Clark Sanders, both of
Foster Law Firm, LLC, of Daniel Island, for Appellant.

Thomas H. Keim Jr. and Lucas James Asper, both of
Ford & Harrison, LLP, of Spartanburg, for Respondent.

PER CURIAM: In this employment matter, Melanie Taylor appeals from the
circuit court's grant of summary judgment in favor of Converse College. We
affirm.
FACTS/PROCEDURAL HISTORY
In April 1997, Appellant Melanie Taylor was offered the position of Assistant
Professor of Piano Pedagogy at Converse College.1 Before Taylor accepted
Converse's offer of employment, she received and reviewed a copy of the Faculty
Handbook. Every year, the President of Converse sent Taylor a letter stating her
salary for the coming year. Each letter advised Taylor: "As always, the terms of
your employment are controlled by the provisions of the College By-Laws and the
Faculty Handbook."

In 2003, Converse granted tenure to Taylor and promoted her to Associate
Professor of Piano Pedagogy. At the time of Taylor's promotion and grant of
tenure, the 2002-2003 Faculty Handbook explained the College's policy governing
termination and dismissal of tenured faculty.2 Section VII of the Faculty
Handbook, entitled "Termination of Employment," stated the conditions under
which Converse could terminate the employment of a tenured faculty member.

In order to preserve institutional integrity, the
employment of a faculty member on tenure or one whose
term contract has not yet expired may be terminated at
any time for the following reasons: financial exigency,
curricular exigency (which includes such reorganization
of the academic structure as may eliminate the
department or discipline of the affected faculty member),
medical circumstances, or cause.

Section VII of the Faculty Handbook further explained that a majority vote of the
Board of Trustees was required to dismiss a tenured faculty member.

In order to preserve institutional integrity, the Board of
Trustees may remove any faculty member at any time by
a majority vote. Such a dismissal may be only for
financial exigency, curricular exigency, medical
circumstances, or cause.

1
Piano pedagogy is the teaching of students to become piano teachers.
2
Subsequent Faculty Handbooks contained the same policies and procedures
regarding termination and dismissal of tenured faculty.
During 2008, Converse's endowment experienced a decline of 33%, and a budget
deficit of $1.8 million was projected for the 2009-2010 academic year. Susan
Stevenson, Chief Financial Officer at Converse since 2005, explained: "Converse
lost 33 percent in our endowment during the drop-off in the investments in the
stock market." Stevenson added that Converse had enrollment concerns, including
"issues with our students' families having lost their income and being able to pay
for tuition."

In November 2008, the Executive Committee of the Board of Trustees instructed
President Elizabeth Fleming to develop various proposals for "organizational and
operational changes at Converse in an effort to ensure the long-term viability and
success of the College." President Fleming was asked to present these proposals to
the Board at their April 2009 meeting. In response to the Executive Committee's
directive, President Fleming appointed three task forces.

The Academic Programs Task Force (APTF) was comprised of the Vice President
of Academic Affairs, tenured faculty members, administrators, and a facilitator. In
January 2009, President Fleming issued written directives to the APTF and
instructed the Task Force to submit its proposals for reorganization to her by April
9, 2009. Specifically, the APTF was asked to recommend 1-3 reorganization
models for academic programs. President Fleming required the following
"deliverable" from the APTF: "Develop[] recommendations that involve fewer
positions; fewer separate and distinct programs, majors, and departments;
increased student: faculty ratio; and a different organizational structure that both
reduces costs and positions the College for strategic growth."

On April 9, 2009, the APTF presented President Fleming with two reorganization
models. Both models recommended eliminating several academic majors,
including the piano pedagogy major.3 Board Chairman William Webster testified
that the Board unanimously approved President Fleming's proposed
Reorganization Plan on April 24, 2009. Webster stated:

[T]he Board, with members of the Academic Affairs
Committee in attendance and voting, unanimously
approved and authorized President Fleming to implement
the Reorganization Plan with full knowledge that the

3
At the time the APTF reviewed student enrollment numbers by major, only one
student had declared piano pedagogy as her major. Between 2004 and 2007, a
total of six piano pedagogy majors had graduated from Converse.
Plan would result in the elimination of majors, the
integration of departments, the relocation of functions
serving students, the reduction and elimination of certain
positions, and the reductions of salary for senior-level
employees. The Board specifically understood at this
time that the Reorganization Plan would result in the
phasing out of eight major programs—French, Modern
Languages, Computer Science, Computer Science and
Mathematics, Music Performance – Organ, Piano
Pedagogy (BA and MA), and Music Business—and the
elimination of seven faculty positions in the coming
years, with four faculty members being offered phased-
out employment or phased-out retirement opportunities.
In order to implement the Reorganization Plan, the Board
authorized and directed President Fleming to extend
generous offers of phased-out employment or phased-out
retirement to the faculty members affected by this Plan.

On May 1, 2009, President Fleming offered a phased-out employment plan to the
four faculty members, including Taylor, who would be affected immediately by the
Reorganization Plan. The phased-out employment plan offered Taylor the
opportunity to continue teaching full-time during the upcoming 2009-2010
academic year and to teach 50% time during the 2010-2011 and 2011-2012
academic years. While Taylor's compensation was to be reduced at the end of the
2009-2010 academic year, Converse offered to maintain Taylor's full benefits
through the 2011-2012 academic year. Taylor declined Converse's offer of
phased-out employment.

On June 2, 2009, the Board approved a motion "expressly approv[ing] and
ratify[ing] the selection" of the four faculty members affected by the Board's
approval of the Reorganization Plan. The Board additionally passed the following
motion:

Because the reduction or elimination of the Associate
Professor Piano Pedagogy position currently occupied by
Dr. Taylor was a key component of the Board-approved
Reorganization Plan, her failure to participate in a
phased-out employment plan leaves the Board no choice
but to terminate her employment. Accordingly, I ask for
a motion that the Board provide President Fleming with
30 days to attempt to negotiate a phased-out employment
plan with Dr. Taylor. If Dr. Taylor fails to agree to such
a phased-out employment plan, President Fleming shall
have the authority to notify Dr. Taylor that she will be
removed from her position and terminated from
employment on August 31, 2010, for curricular exigency.

Also, the Board authorized Taylor's continued employment as a "full-time tenured
faculty member" during the 2009-2010 academic year.

On July 16, 2009, Taylor filed a grievance pursuant to Section VII of the Faculty
Handbook. The Grievance Committee conducted a hearing on August 17, 2009.
Thereafter, the Grievance Committee found "that the grounds of Dr. Taylor's
grievance are not supported and recommended that the grievance be resolved in
favor of President Fleming." In a letter dated September 1, 2009, William
Webster, Chairman of the Board of Trustees, informed Taylor and President
Fleming of the Committee's decision, stating: "I hereby adopt the
recommendations of the Grievance Committee and deny Dr. Taylor's grievance in
whole." Webster's letter explained:

The Board unanimously approved the proposed
reorganization plan and directed President Fleming to
implement the plan. President Fleming implemented the
plan as directed, which led to the elimination of the Piano
Pedagogy major. Based on the elimination of the Piano
Pedagogy major, there existed curricular exigency
sufficient to warrant the Board's decision to terminate Dr.
Taylor's employment. Thus, President Fleming and the
Board acted within the parameters of the Handbook in
terminating Dr. Taylor's employment, and Dr. Taylor's
grievance is denied accordingly.

Webster's letter concluded: "This is the precise type of action that must have been
envisioned in drafting the Handbook provisions allowing the Board to take
measures such as those that have affected Dr. Taylor 'in order to preserve
institutional integrity.'"

On October 13, 2009, Taylor filed a complaint requesting a declaratory judgment
and temporary and permanent injunctions; she additionally alleged actions for
breach of contract, breach of contract accompanied by a fraudulent act, fraud in the
inducement, and intentional misrepresentation. Both parties filed motions for
summary judgment. Prior to the hearing on the parties' motions for summary
judgment, the parties submitted memoranda accompanied by extensive exhibits
and deposition testimony. On September 17, 2010, the circuit court conducted a
hearing on the parties' motions for summary judgment. Several months after the
hearing, Taylor filed a "notice of additional fact relevant to [her] motion for
summary judgment." In this notice, Taylor asserted that Converse had hired an
adjunct professor to teach piano pedagogy classes.

On August 2, 2011, the circuit court granted summary judgment in favor of
Converse on each of Taylor's claims, and the court denied Taylor's motion for
summary judgment. This appeal followed.

ISSUES ON APPEAL
1. Did the circuit court err in granting summary judgment in favor of Converse
College on Taylor's claims of breach of contract and breach of contract
accompanied by a fraudulent act?

2. Did the circuit court err in granting summary judgment in favor of Converse
College on Taylor's claims of fraud and intentional misrepresentation?

LAW/ANALYSIS

1. Breach of Contract Claims
Taylor contends the trial court erred in granting summary judgment in favor of
Converse on her breach of contract claims. We disagree.

"To recover for a breach of contract, the plaintiff must prove: (1) a binding
contract; (2) a breach of contract; and (3) damages proximately resulting from the
breach." Manios v. Nelson, Mullins, Riley & Scarborough, LLP, 389 S.C. 126,
146, 697 S.E.2d 644, 655 (Ct. App. 2010) (citing Fuller v. E. Fire & Cas. Ins. Co.,
240 S.C. 75, 89, 124 S.E.2d 602, 610 (1962)).

To maintain an action for breach of contract
accompanied by a fraudulent act, a plaintiff must prove
three elements: "(1) a breach of contract; (2) fraudulent
intent relating to the breaching of the contract and not
merely to its making; and (3) a fraudulent act
accompanying the breach." Conner v. City of Forest
Acres, 348 S.C. 454, 465-66, 560 S.E.2d 606, 612
(2002). "Fraudulent act" is broadly defined as "any act
characterized by dishonesty in fact or unfair dealing." Id.
at 466, 560 S.E.2d at 612.

RoTec Servs., Inc. v. Encompass Servs., Inc., 359 S.C. 467, 470, 597 S.E.2d 881,
883 (Ct. App. 2004) (emphasis added); see McCullough v. The Am. Workmen, 200
S.C. 84, 95, 20 S.E.2d 640, 644 (1942) (distinguishing between "a simple breach of
contract" and "fraud in the breach of the contract").

Taylor identities several areas in which she contends Converse breached the
parties' contract. Taylor argues: (1) the Board of Trustees had no authority to offer
"phased out" employment to a tenured professor; (2) the circuit court failed to
consider the sequence of events leading to her employment termination; (3) there
was no evidence that the Board removed her from her tenured position due to
"curricular exigency"; (4) the circuit court ignored the clear language of the
contract; and (5) the subsequent hiring of an adjunct professor to teach piano
pedagogy was a violation of the terms of the Faculty Handbook.

The circuit court found, and the parties agreed, that the Faculty Handbook
"constitute[d] a contract" between Taylor and Converse College. However, in
finding that Converse had not breached its contract with Taylor, the circuit court
stated:

[T]aylor has failed to identify a single provision from
within the Handbook—the "contract" that Converse
allegedly breached—that she can prove Converse
violated through its decisions to remove her from
employment on the basis of curricular exigency. To the
contrary, the express provisions of the Handbook
demonstrate that Converse has acted in accordance
therewith.

We agree with the circuit court's determination.

Article I, Section 2 of the Converse College Bylaws states that "Converse College
shall be governed by a Board of Trustees." Taylor's arguments fail to acknowledge
that the Board of Trustees has the express power to terminate the employment of a
tenured faculty member when one of four specific circumstances exists. The
Board's authority to terminate a tenured faculty member is unambiguous and is
clearly stated at the beginning of Section VII of the Faculty Handbook:

In order to preserve institutional integrity, the
employment of a faculty member on tenure or one whose
term contract has not yet expired may be terminated at
any time for the following reasons: financial exigency,
curricular exigency (which includes such reorganization
of the academic structure as may eliminate the
department or discipline of the affected faculty member),
medical circumstances, or cause.

This section of the Faculty Handbook also explains the procedure for dismissing a
faculty member with tenure: "In order to preserve institutional integrity, the Board
of Trustees may remove any faculty member at any time by a majority vote. Such
a dismissal may be only for financial exigency, curricular exigency, medical
circumstances, or cause."

In sum, there is no question that the Bylaws granted the Board of Trustees absolute
authority to address the urgent and challenging issues facing the College during a
severe financial downturn. In November 2008, the Board, under its authority to
govern Converse, properly directed its President to develop proposals for ensuring
"the long-term viability and success of the College." The urgency then facing the
Board is evidenced in its requirement that the President present recommendations
at the April 2009 meeting of the Board. The Reorganization Plan was
unanimously approved by the Board, which included the members of the Board's
Academic Affairs Committee. The approved Reorganization Plan necessitated the
phasing out of eight major programs, including the BA and MA Piano Pedagogy
majors. This phase-out of eight curricular programs constituted the "curricular
exigency" that is referred to in the Faculty Handbook as a condition under which
the employment of a tenured faculty member may be terminated. In June 2009, the
Board passed a motion that expressly required the termination of Taylor's
employment—"for curricular exigency"—if a phased-out employment plan could
not be negotiated with her.

There is no evidence to support Taylor's claim that Converse breached any
obligation it owed to her pursuant to the Faculty Handbook. The Bylaws vest the
complete and unlimited power of governance in the Board of Trustees (Article 1,
Section 2). Because there are no limitations on the Board's power to govern
Converse, and because the Board followed the termination and dismissal
procedures outlined in the Faculty Handbook in terminating Taylor's employment,
the trial court properly granted summary judgment in favor of Converse on each of
Taylor's breach of contract claims. Moreover, because there was no breach of
contract, Taylor's action for breach of contract accompanied by a fraudulent act
must fail.
Accordingly, the circuit court properly granted summary judgment in favor of
Converse on Taylor's claims for breach of contract and breach of contract
accompanied by a fraudulent act.

2. Fraud in the Inducement and Intentional Misrepresentation
Taylor additionally asserts: "There are issues of fact in this case as to whether
[Converse] has made false representations regarding its tenure system and whether
[Converse] intended to deceive [Taylor] regarding the significance of her tenured
status." We disagree.

To prevail on her claims of fraud and intentional misrepresentation, Taylor must
establish nine elements by clear and convincing evidence:

In order to recover in an action for fraud and deceit,
based upon misrepresentation, the following elements
must be shown by clear, cogent and convincing evidence:
(1) a representation; (2) its falsity; (3) its materiality; (4)
either knowledge of its falsity or a reckless disregard of
its truth or falsity; (5) intent that the representation be
acted upon; (6) the hearer's ignorance of its falsity; (7)
the hearer's reliance on its truth; (8) the hearer's right to
rely thereon; (9) the hearer's consequent and proximate
injury. Failure to prove any one of the foregoing
elements is fatal to recovery.

M. B. Kahn Const. Co. v. S.C. Nat'l. Bank of Charleston, 275 S.C. 381, 384, 271
S.E.2d 414, 415 (1980); see also Dailey Co. v. Amer. Instit. of Mktg. Sys., Inc., 256
S.C. 550, 553, 183 S.E.2d 444, 446 (1971) ("[W]here one promises to do a certain
thing, having at the time no intention of keeping his agreement, it is a fraudulent
misrepresentation of a fact, and actionable as such.").

For Taylor's claim to survive, she must produce evidence that Converse knowingly
made a false representation to her. Taylor contends: "A jury could find
[Converse's] representations regarding tenure were false." Taylor additionally
maintains: "It is for a jury to decide whether [Converse's] statements about tenured
professors in the Faculty Handbook were false, whether [Taylor's] reliance on
[Converse's] tenure policy in the Faculty Handbook was reasonable, and whether
[Converse] recklessly and intentionally disregarded its tenure policy when it
"phased out" [Taylor's] employment and terminated her when she was fully
capable of, and remains fully capable of, teaching a wide variety of music and
piano courses at Converse."

To the contrary, the evidence shows that Converse restricts the termination of
tenured faculty to a few limited and extraordinary circumstances that are clearly
delineated in the Faculty Handbook. Taylor testified that she received and
reviewed the Faculty Handbook prior to accepting the position at Converse.
Taylor points to no statement in the Faculty Handbook that is in conflict with the
Board's action to terminate her employment for curricular exigency. Instead, she
simply contends the Board knowingly misrepresented the existence of a curricular
exigency. Such an allegation is without merit in light of the elimination of eight
major programs of study and the significant cost-saving measures invoked by
Converse during the period in which Taylor's employment was terminated.

Because Taylor is unable to show that Converse made a false representation to her,
the court properly granted summary judgment in favor of Converse on Taylor's
claims of fraud and intentional misrepresentation.

For the foregoing reasons, the circuit court's order is

AFFIRMED.1

HUFF, THOMAS, and GEATHERS, JJ., concur.

1
We decide this case without oral argument pursuant to Rule 215, SCACR.