Family Must Pay Full Tuition Amount For Withdrawing Children After Enrollment Agreement Cancellation Date

CATEGORY: Private Education Matters
CLIENT TYPE: Private Education
DATE: Apr 25, 2024

In February 2019, a family enrolled their four children at Francis Parker School for the academic year from September 2019 to June 2020.  They enrolled via a third-party website the School used to provide a platform for enrollment of students, payment of tuition, and purchase of tuition refund plan for students who withdraw.

The language in the enrollment agreement stated that by signing, the parents agreed they were responsible for the full amount of tuition and timely payment of tuition when the student was accepted.  The enrollment agreement provided for a cancelation date of June 14, 2019, after which the tuition became nonrefundable.  The enrollment agreement noted that tuition would not be refunded in the event the student withdrew or was dismissed for any reason at any time, regardless of whether another student was enrolled.  The enrollment agreement also contained language that the School had a right to collect unpaid tuition via a collection agent or legal action.

The parents electronically signed the enrollment agreement and paid in installments, which required them to purchase a tuition refund plan from third party, A.W.G. Dewar, Inc.  The tuition refund plan allowed the family to recover 75 percent of unused tuition if children withdrew for certain reasons.

On August 30, 2019, the parents withdrew.  At that time, they had made tuition payments totaling roughly $30,000 and with interest and other charges, owed approximately $100,000 more.

The School filed a complaint to recover the unpaid portion of the tuition, asserting that the parents had breached the contract.  Then, the School filed a motion for summary judgment, arguing there was no dispute that the family withdrew their children after the tuition became due, the tuition was nonrefundable, and the family did not pay the full amount.

The trial court ruled in favor of the School, holding that the tuition agreement was a valid contract and that the family breached the contract by refusing to pay after tuition became due.  The parents appealed.

The Court of Appeals concluded that the School met its burden for establishing breach of contract.  The School showed that a contract existed; that the School had reserved spaces for the four children for the 2019-2020 academic year and budgeted and planned in consideration of their enrollment for the year; that the parents withdrew after the tuition became due; and that the parents still owed the outstanding balance.

On appeal, the parents argued for the first time that the tuition agreement’s provision that the full amount of tuition was nonrefundable after June 14, 2019 relieved the School of any duty to mitigate damages, and therefore was an unenforceable liquidated damages clause.  The School argued that the parents forfeited this argument by not making it at the trial court level.

The Court of Appeals agreed with the School.  The Court reasoned that the tuition agreement allocated to the parents’ risk that their children would not attend.  The language in the contract was clear and unambiguous and the family could not bring up these new arguments on appeal.  The Court of Appeals affirmed the trial court’s judgment.

Note: This case shows the importance of a well-crafted and clear enrollment agreement. 

Francis Parker Sch. v. O’Brien (2023) ___Cal.App.5th___ [2023 Cal. App. Unpub. LEXIS 7568].

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