Spencer et al v. Vatterott Educational Centers, Inc. et al

Filing 134

OPINION AND ORDER by Magistrate Judge Kimberly E. West granting 92 Motion for Summary Judgment and granting 125 Joinder in Motion. Judgment will issue accordingly. (adw, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF OKLAHOMA
JOHNNY SPENCER; and
MICHAEL CHAMBERS,
individually and
on behalf of all others
similarly situated,

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Plaintiffs,
v.
VATTEROTT EDUCATIONAL
CENTERS, INC., a foreign for
profit business corporation;
and STEPHANIE SANDERS,
an individual,
Defendants.

Case No. CIV-12-116-KEW

OPINION AND ORDER
This matter comes before the Court on Defendant Vatterott
Educational Centers, Inc.’s Motion for Summary Judgment (Docket
Entry #92) and Defendant Stephanie Sanders’ Adoption of the Motion
for Summary Judgment (Docket Entry #125).

Upon review of the

briefing and the evidence, this Court enters this ruling on the
pending Motions.
Facts Relevant to Plaintiff Johnny Spencer’s Claims
On September 23, 2009, Plaintiff Johnny Spencer (“Spencer”)
enrolled in the Electrical Mechanic diploma program offered by
Defendant

Vatterott

Educational

Centers,

Inc.

(“Vatterott”).

Around the time of his enrollment, Spencer spoke to Cathy Millikan
(“Millikan”),

an

employee

in

Vatterott’s

facility

in

Tulsa,

Oklahoma. During their discussions, Spencer informed Millikan that
he was a convicted felon.

Spencer testified that Millikan “was

very adamant” not to worry about his felony conviction noting “it’s
a felony friendly field, plus we have companies that we work with
that will - - would be interested in hiring you once you graduate.”
Spencer believed the term “felony friendly” meant that “even though
I had a felony, even though I had committed a felony, that it was
a field that I could go into and still be able to gain employment
because the companies would not hold it against you as much as
other companies.”
Besides seeking to become an electrical engineer, Spencer had
sought to become a registered nurse.

However, after he committed

felonies, he learned he could not be a registered nurse.
Upon completing the program with Vatterott, Spencer enrolled
in

Vatterott’s

Associate

Technology program.
2011.

of

Occupational

Studies-Electrical

He graduated from the program on July 17,

After his graduation, Spencer obtained employment with

Contractors Unlimited, a placement service.

He was employed as an

apprentice doing “the kind of work [he] liked to do.”
would have liked to do more than apprentice work.

Spencer

He was paid

$16.00/$17.00 per hour while at Contractors Unlimited.
After leaving Contractors Unlimited, Spencer obtained a job
with Tulsa County Public Facilities at the Tulsa Fair Grounds as an
electrical apprentice working 40 hours per week. Spencer performed
electrical maintenance and repair work, working on “anything to do
with power or electricity out at the fairgrounds, my - - that was

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pretty much my field.”

He was not sure whether Tulsa County was

aware of his prior felonies.

Spencer was eventually laid off from

this job due to budget issues.
Spencer went to work for Advanced Technical Services (“ATS”),
a company for which he had worked prior to attending Vatterott. He
had a good employment history with ATS and when positions became
available, ATS provided him employment.

When Spencer had worked

for ATS before attending Vatterott, he earned $13.00/$14.00 per
hour.

After graduating from Vatterott, Spencer was employed in

Kingsport, Tennessee with ATS earning $17.00/$18.00 per hour.

The

increased salary was attributed to Spencer’s completion of the
Vatterott electrical mechanical program and represented the highest
salary he had earned.
Spencer believes he was not hired for one job for which he
applied at Nippa Corporation in Tulsa, Oklahoma.

Spencer applied

for

filled

an

electrical

application.

maintenance

position

and

out

an

The application provided a space to list any felony

convictions and Spencer listed his convictions.

Spencer received

an interview and the interviewer inquired about his convictions.
Spencer provided an explanation.

The interview did not expressly

make a statement that Nippa Corporation had a policy against hiring
people with a felony, but she definitely seemed concerned about the
felonies.

Spencer was not hired but was provided no explanation

for why he was not hired.

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Spencer also felt another company, Oil Capital Electric, did
not hire him because of his felony convictions but was not told
this was the reason he was not hired.
Spencer also applied to Whirlpool and received an interview
but was never called back.

The issue of his prior felonies came up

but “it wasn’t as in-depth as previous employers.”
Michael

Chambers

(“Chambers”),

who

also

had

Plaintiff

prior

felony

convictions, testified he applied to Whirlpool through a temp
agency and was hired.
Spencer testified in his deposition that “[he] believe[s] that
there may be businesses out there that possibly may give you an
opportunity” with prior felony convictions.
Facts Relevant to Plaintiff Michael Chambers’ Claims
On October 13, 2009, Chambers enrolled in Vatterott’s Heating,
Air Conditioning and Refrigeration Mechanic program.
enrolling,

Chambers

spoke

with

Defendant

(“Sanders”), an employee of Vatterott.

Stephanie

Prior to
Sanders

Sanders gave Chambers a

tour of the Vatterott facility in Tulsa, Oklahoma.

She told

Chambers that they had small class sizes - no more than five to ten
people in the classroom.

Chambers noted his first day of class,

the classroom had 35 students.

Chambers spoke to someone at

Vatterott to complain about the class size and was told for some
reason they had a big turn out this time.

Chambers did not seek to

obtain a refund in accordance with his enrollment agreement with

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Vatterott.
Chambers also stated that he told Sanders about his felony
convictions.

Chambers testified Sanders told him that “with a

degree, especially from Vatterott, that the employers is (sic)
going to overlook all of that with a license, a degree, and a
skill, that the employers will overlook that.”

Chambers also

stated Sanders told him about Vatterott’s 100 percent placement
rate.
Chambers testified by deposition that Sanders told him that
the career he chose was “felony friendly.”

He understood the term

to mean “they are not going to discriminate on me because of my
felonies.”
Chambers also spoke with Millikan about employment placement
before he graduated.

Millikan also referenced a 100 percent

placement rate.
Chambers

had

never

worked

in

the

HVAC

industry

before

attending Vatterott but had worked in welding, which he considered
to be a “felony friendly” industry.

He did consider that he was

precluded from employment in the health care industry because
employers are not “felony friendly” in that field.

Chambers

discussed the medical program at Vatterott with Sanders but she
informed him that he could not get into that field because of his
felony.
Chambers completed the Vatterott program in December of 2010.

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He obtained employment with Omni Mechanical as a sheet metal
worker. He earned $14.00 per hour plus overtime pay. Chambers did
not

report

his

felony

convictions

on

the

Omni

Mechanical

application because it only required convictions during the last
ten years.
Omni

Chambers’ convictions dated from 1995 and 1997.

Mechanical

conviction

would

employment

-

application
not

factors

expressly

necessarily
such

as

stated

disqualify

age,

date

of

that
a

a

The

felony

person

from

conviction,

the

seriousness and nature of the crime, and rehabilitation would be
considered.

Chambers considered Omni Mechanical as a “felony

friendly” employer.
Chambers also took an HVAC examination from the Oklahoma
Construction Industries Board to obtain a journeyman license.
Chambers passed the examination and obtained his license, although
it was expired at the time of his deposition.
With his license, Chambers was hired by Oasis Mechanical as a
foreman.
air

He supervised a crew of workers installing heating and

conditioning

units

in

a

new

apartment

complex

being

constructed. Chambers does not remember filling out an application
for the job nor did the person that hired him at Oasis Mechanical
ask him about prior felony convictions.
Chambers then applied for a job with Masi Mechanical and
received an interview.

He was asked about his felony convictions

and he explained to the interviewer about the nature of the

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convictions.

Chambers was hired despite his felony convictions.

He “basically was a helper” or an apprentice, tearing down duct
work to be replaced.

Chambers earned $12.00 per hour.

Chambers also obtained a job with Triad Heating & Air working
as a serviceman which is the type of employment he went to
Vatterott to become.

Chambers believes the application requested

information about felony convictions.
& Air hired Chambers.

In any event, Triad Heating

He earned between $12.00 and $14.00 per

hour.
Chambers

was

Richardson, Texas.

also

hired

by

N-Tech

Services

in

North

His job involved servicing heating and air

which entailed the same work he learned at Vatterott.
earned $15.00 per hour.

Claimant

Chambers stated he was fired because he

“didn’t know enough.”
Chambers was hired by Filtrex, a heating and cooling company
performing maintenance on air conditioners.

Chambers traveled

extensively on this job and earned $900.00 per week.
Facts Relevant to the Breach of Contract Claim
The Enrollment Agreement signed by Spencer on September 23,
2009 and October 25, 2010 and by Chambers on October 12, 2009
contained

a

refund

policy

provision.

Spencer

and

Chambers

identified this provision as a basis for their breach of contract
claim asserting Vatterott did not live up to their obligation under
this provision.

The Refund Policy states

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Refund Policy
In accepting applications, the COLLEGE has assumed the
obligation to of furnishing a complete program, teachers,
equipment, laboratories, classrooms and other facilities
necessary for teaching those programs at a stated offered
tuition cost for the program and with the understanding
that refunds will be made based on an academic year (36
quarter credit hours/30 weeks) . . .
Enrollment Agreement (Contract), ¶ 10.
Vatterott also stated in the Enrollment Agreement that “[u]pon
satisfactory completion of program, and payment of all charges, the
COLLEGE will furnish the STUDENT with a Diploma and transcript or
a specialized degree and transcript for occupational associate
degree level courses.”

Enrollment Agreement (Contract), ¶ 7.

Spencer testified that Vatterott did not furnish a complete
program because his initial instructor, Brian Goodwin (“Goodwin”),
some days did not teach the class, although he was present.
Instead, Goodwin would “filibuster with one student the majority of
the time.” Spencer stated Goodwin would sit in front of a computer
and work on projects that had nothing to do with the class.
Goodwin then quit.
Another instructor, Mark Threadgill (“Threadgill”), took over
the class.
his own.

Threadgill threw out Goodwin’s curriculum and started
Spencer objected to the two instructors not having the

“same agenda as far as giving an education.”

Spencer also stated

that the course was not satisfactorily completed even though he
received a diploma and AOS.

He felt his diploma was “worthless”

because he could not program traffic lights with Tulsa County.
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He

also testified that the class started and then abruptly ended
during which at one point he did not have an instructor who was
capable of answering the students’ questions and satisfactorily
educating them in the manner that they should have been educated.
Chambers also testified he did not believe he received the
education on how to actually do what he was going to school for.
He stated instructors were not present like they should have been
and the course was not “as great as they said that it was.”
Standard on Summary Judgment
Under Rule 56(c) of the Federal Rules of Civil Procedure, summary
judgment is appropriate "if the pleadings, depositions, answers to
interrogatories,

and

admissions

on

file,

together

with

the

affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to judgment as
a matter of law."

Universal Money Centers v. A.T. & T., 22 F.3d

1527, 1529 (10th Cir.), cert. denied, 513 U.S. 1052, 115 S.Ct. 655,
130 L.Ed.2d 558 (1994).

The moving party bears the initial burden

of showing that there is an absence of any issues of material fact.
Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 255354, 91 L.Ed.2d 265 (1986).

A genuine issue of material fact exists

when "there is sufficient evidence favoring the nonmoving party for
a jury to return a verdict for that party."

Anderson v. Liberty

Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2510-11, 91 L.Ed 2d
202 (1986).

In determining whether a genuine issue of a material

9

fact exists, the evidence is to be taken in the light most favorable
to the nonmoving party.

Adickes v. S.H. Kress & Co., 398 U.S. 144,

157, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142 (1970).

Once the moving

party has met its burden, the opposing party must come forward with
specific evidence, not mere allegations or denials of the pleadings,
which demonstrates that there is a genuine issue for trial. Applied
Genetics v. Fist Affiliated Securities, 912 F.2d 1238, 1241 (10th
Cir. 1990); Posey v. Skyline Corp., 702 F.2d 102, 105 (7th Cir.
1983).

With regard to the material facts set forth above, this

Court finds no significant dispute.

Conclusions of Law on Fraud Claims
Spencer and Chambers assert Vatterott, through its employees,
made misrepresentations which constitute actionable fraud.

Common

law fraud in Oklahoma requires 1) a false material representation,
2) made as a positive assertion which is either known to be false,
or made recklessly without knowledge of the truth, 3) with the
intention that it be acted upon, and 4) which is relied upon by a
party to that party's detriment.
902 (Okla. 1998).

Miller v. Miller,

956 P.2d 887,

Essential to any fraud claim is that the

representation giving rise to the claim be false.
Spencer

and

Chambers

narrow

their

testimony

to

two

representations made by Vatterott which they allege were material
and false - 1) that the training areas in which they were seeking
a diploma were “felony friendly”; and 2) that Vatterott had a 100

10

percent placement rate for its graduates.

As for the first

representation, this Court cannot conclude that the representation
made by Vatterott through its employees was false.

Both Spencer

and Chambers obtained employment on multiple occasions in their
chosen fields in spite of their past felony convictions with the
employers in most instances aware of those convictions.

To a

degree, the term “felony friendly” is vague and ambiguous and not
the type of representation which is subject to actionable fraud.
The term could be an opinion of the declarant, could involve the
declarant’s experience in placing graduates and with employers, or
could be mere puffery.

But considering the manner in which it was

interpreted by Spencer and Chambers as not posing an impediment to
future employment, the term is not a material misrepresentation and
cannot be pursued in a fraud claim.
As for the second representation - that Vatterott places 100
percent of graduates, this Court finds that no evidence exists in
this

record

information

to

indicate

when

these

that

Sanders

or

representations

demonstrating the falsity of the assertion.

Millikan

were

possessed

allegedly

made

Spencer and Chambers

provide statistics published in 2010 concerning the placement of
graduates in 2009 but do not provide evidence that Sanders or
Millikan were in possession of such information at the time the
representations

were

allegedly

made

to

them.

Any

false

representation which forms the basis of a fraud claim must be

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relative to existing facts at the time of the representation and
made with knowledge of the falsity of the statement.

See, Roberts

v. Wells Fargo AG Credit Corp., 990 F.2d 1169, 1172 (10th Cir.
1993).

As a result, Spencer’s and Chambers’ fraud claims cannot

stand.
Since Sanders was one of the particular representatives of
Vatterott who allegedly made the statements forming the basis of
Spencer’s and Chambers’ fraud claims, she will be entitled to
summary judgment for substantially the same reasons as Vatterott.
Conclusions of Law on Breach of Contract Claims
Spencer and Chambers also contend that Vatterott breached its
contract with them through the Enrollment Agreement, contending it
did not “satisfactorily educat[e] us the way we should have been
educated.”

The weight of authority precludes a cause of action,

based either in tort or contract, for “educational malpractice”
“asserting inadequate or improper instruction.” Bittle v. Oklahoma
City Univ., 6 F.3d 509, 514 (Okla. Ct. App. 2000)(citations
omitted). A cause of action for breach of contract in this context
can only be maintained if the student demonstrates the existence of
a specific, identifiable agreement for an educational institution’s
provision of particular services to the student.
The

Enrollment

Agreement

only

provides

Id.
for

the

general

obligation for Vatterott to provide “a complete program, teachers,
equipment, laboratories, classrooms and other facilities necessary

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for teaching those programs . . . .”

While Spencer complains that

a teacher was essentially incompetent and quit to be replaced by
another teacher, this situation did not violate the vague and
generalized

obligations

of

Agreement.

Spencer

Chambers

and

Vatterott
point

under
to

the
no

Enrollment

other

written

materials provided by Vatterott, no minimum number of hours which
were not provided, or classroom space which was not offered from
which their breach of contract claims could arise.

By virtue of

their own testimony, Spencer and Chambers were simply unsatisfied
with the product sold to them by Vatterott and in the educational
context, the claims represent educational malpractice allegations
which are not actionable in contract.
IT IS THEREFORE ORDERED that Defendant Vatterott Educational
Centers, Inc.’s Motion for Summary Judgment (Docket Entry #92) and
Defendant Stephanie Sanders’ Adoption of the Motion for Summary
Judgment (Docket Entry #125) are hereby GRANTED.

Judgment will

issue accordingly.
IT IS SO ORDERED this 30th day of September, 2015.

______________________________
KIMBERLY E. WEST
UNITED STATES MAGISTRATE JUDGE

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