# Squeri v. Mount Ida College

> District Court, D. Massachusetts · May 24, 2019

URL: https://www.frixlaw.com/law-library/cases/10197725

## Case

- **Court:** District Court, D. Massachusetts
- **Decided:** May 24, 2019
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS

CIVIL ACTION NO. 18-12438-RGS

TRISTAN SQUERI, MADELINE McCLAIN, and GEORGE O’DEA,
individually and on behalf of all others similarly situated

v.

MOUNT IDA COLLEGE, et al.

MEMORANDUM AND ORDER ON
DEFENDANTS’ MOTIONS TO DISMISS

May 24, 2019

STEARNS, D.J.
After more than a century of operation, Mount Ida College closed
suddenly at the end of the 2018 academic year. Three students, Tristan
Squeri, Madeline McClain, and George O’Dea, brought this putative class
action against Mount Ida College; its Board of Trustees; the Board’s
Chairwoman, Carmin Reiss; the President, Barry Brown; the Vice President,
Chief Financial Officer, and Treasurer, Jason Potts; the Vice President of
Enrollment Management and Dean of Admissions, Jeff Cutting; and the
Chief Academic Officer and Provost, Ron Akie.1 Plaintiffs, on behalf of

1 Plaintiffs claim that the court has jurisdiction under the Class Action
Fairness Act (CAFA), 28 U.S.C. § 1332(d), because “[t]he amount-in-
controversy exceeds $5,000,000.00 and minimal diversity exists between
the parties.” Am. Compl. (Dkt # 12) ¶ 19. While CAFA contains a home-state
former and prospective Mount Ida students,2 allege that defendants failed to
inform them of Mount Ida’s dire financial straits and shared their academic

and financial profiles with the University of Massachusetts (UMass)
Dartmouth without their consent. More specifically, the Amended
Complaint sets out seven claims: violation of privacy under Mass. Gen. Laws
ch. 214, § 1B (Count I), fraud (Count II), negligent misrepresentation (Count

III), fraud in the inducement (Count IV), breach of fiduciary duty (Count V),
breach of contract (Count VI), and unfair and deceptive practices in violation
of Mass. Gen. Laws ch. 93A, § 9 (Count VII). Defendants move to dismiss

the Amended Complaint for failure to state a claim.3 For the reasons to be
explained, defendants’ motions to dismiss will be allowed.
BACKGROUND
The facts, viewed in the light most favorable to plaintiffs as the

nonmoving party, are as follows. Mount Ida College was a not-for-profit

exception under section 1332(d)(4)(B), Mount Ida represents that “at least
one-third of its student body was typically from outside of Massachusetts.”
College Mem. (Dkt # 27) at 7 n.9.

2 The putative class is of “[a]ll students and prospective students of
Mount Ida College at the time Mount Ida College closed,” Am. Compl. ¶ 47,
purportedly consisting of over 1,400 members, id. ¶ 49.

3 Mount Ida, the Board of Trustees, Reiss, Cutting, and Akie filed one
motion to dismiss, while Brown and Potts filed separate motions of their
own.
institution with a principal place of business in Foxborough, Massachusetts.
Mount Ida closed its doors on May 17, 2018. According to the Amended

Complaint, defendants knew that Mount Ida was struggling financially in as
early as 2014, but failed to disclose its precarious fiscal state to current and
prospective students. Plaintiffs point to the fact that in 2017, defendants
reported to the New England Association of Schools and Colleges (NEASC)

that, among other things, Mount Ida was financially stable. On February 24,
2018, Mount Ida announced that it had entered merger negotiations with
Lasell College, but did not attribute the potential merger to any financial

pressure. On March 21, 2018, defendants rejected the terms of the merger
and, two days later, informed the Mount Ida community that they had
broken off the talks with Lasell. On April 6, 2018, Brown sent a blast email
to enrolled students informing them that Mount Ida had agreed to sell its

Newton, Massachusetts, campus to UMass Amherst and that all current
students would be guaranteed admission to UMass Dartmouth. On
November 26, 2018, plaintiffs brought this lawsuit.
DISCUSSION

“To survive a motion to dismiss, a complaint must contain sufficient
factual matter, accepted as true, to ‘state a claim to relief that is plausible on
its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009), quoting Bell Atl. Corp.
v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible if its
factual content “allows the court to draw the reasonable inference that the

defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. “If
the factual allegations in the complaint are too meager, vague, or conclusory
to remove the possibility of relief from the realm of mere conjecture, the
complaint is open to dismissal.” Rodríguez-Reyes v. Molina-Rodríguez, 711

F.3d 49, 53 (1st Cir. 2013), quoting SEC v. Tambone, 597 F.3d 436, 442 (1st
Cir. 2010) (en banc).
Violation of Privacy

Plaintiffs allege that defendants violated their privacy rights under
Mass. Gen. Laws ch. 214, § 1B, by disclosing their “sensitive and private
student academic data” to UMass Dartmouth without their consent.4 Am.
Compl. ¶ 57. “To sustain a claim for invasion of privacy, the invasion must

be both unreasonable and substantial or serious.” Nelson v. Salem State
Coll., 446 Mass. 525, 536 (2006). “Generally, whether an intrusion qualifies
as unreasonable, as well as either substantial or serious, presents a question

4 Although plaintiffs also allege that this disclosure violated the Family
Educational Rights and Privacy Act (FERPA), 20 U.S.C. § 1232g, they
concede in their Opposition that the statute does not confer a private right of
action. Opp’n to College (Dkt # 36) at 12; see also Gonzaga Univ. v. Doe,
536 U.S. 273, 287 (2002) (“[T]here is no question that FERPA’s
nondisclosure provisions fail to confer enforceable rights.”).
of fact.” Polay v. McMahon, 468 Mass. 379, 383 (2014). However,
“legitimate countervailing business interests . . . may render the disclosure

of personal information reasonable and not actionable under the statute.”
Bratt v. Int’l Bus. Machines Corp., 392 Mass. 508, 520 (1984).
Here, plaintiffs’ allegations fail to establish that the disclosure of their
records to UMass Dartmouth was unreasonable as a matter of law. To the

contrary, Mount Ida submitted the records to UMass Dartmouth to facilitate
plaintiffs’ enrollment at the successor institution. The transfer of records,
therefore, served a “legitimate purpose,” Polay, 468 Mass. at 383, and was

indisputably conducted in accordance with the Massachusetts Attorney
General’s May 15, 2018 guidance letter, see College Mem., Ex. F. at 5
(directing the transfer of student records using “an anonymized set of unique
student identifiers” and noting that “UMass Amherst has agreed to become

the ‘institution of record’”),5 and Massachusetts regulations, see 610 C.M.R.
§ 2.07(3)(f)(2) (“If an institution knows that it may close, . . . it shall
arrange . . . to safeguard the needs of students by organizing educational

5 Despite plaintiffs’ objection, the court may consider this letter, along
with Mount Ida’s financial statements and the NEASC reports, because they
are public records or are referenced in the Amended Complaint. See Lydon
v. Local 103, Int’l Bhd. of Elec. Workers, 770 F.3d 48, 53 (1st Cir. 2014) (“On
a motion to dismiss, . . . a judge can mull over ‘documents incorporated by
reference in [the complaint], matters of public record, and other matters
susceptible to judicial notice.’”).
transfer opportunities, and ensuring the preservation of student records[.]”).
Thus, plaintiffs’ privacy claim fails as a matter of law. See Ortiz v.

Examworks, Inc., 470 Mass. 784, 793 (2015) (“Because the examination was
authorized under [Mass. Gen. Laws ch. 90,] § 34M, the invasions of privacy
associated with its taking place were ‘justified.’”); Schlesinger v. Merrill
Lynch, Pierce, Fenner & Smith, Inc., 409 Mass. 514, 518 (1991) (“The statute

obviously was not intended to prohibit serious or substantial interferences
which are reasonable or justified.”).
Fraud, Negligent Misrepresentation, Fraud in the Inducement

Plaintiffs next allege that defendants committed fraud, negligent
misrepresentation, and fraud in the inducement by “continu[ing] to hold
Mount Ida out as a viable institution” even though they knew, or should have
known, that it was failing financially. Am. Compl. ¶¶ 65, 77. “To establish a

claim for fraud under Massachusetts law, a plaintiff must prove that ‘the
defendant made a false representation of material fact with knowledge of its
falsity for the purpose of inducing the plaintiff to act thereon, and that the
plaintiff reasonably relied upon the representation as true and acted upon it

to his damage.’” Taylor v. Am. Chemistry Council, 576 F.3d 16, 31 (1st Cir.
2009), quoting Russell v. Cooley Dickinson Hosp., Inc., 437 Mass. 443, 458
(2002). To sustain a claim of negligent misrepresentation, a plaintiff need
not show that a defendant knew the statement to be false, but must show that
the defendant failed “to exercise reasonable care or competence in obtaining

or communicating the information.” Nota Constr. Corp. v. Keyes Assocs.,
Inc., 45 Mass. App. Ct. 15, 20 (1998).
Defendants argue, and the court agrees, that plaintiffs fail to identify
any statement that can be shown to have actually been false. According to

the allegations of the Amended Complaint: (1) defendants announced, on
February 24, 2018, a potential merger with Lasell College, without
referencing Mount Ida’s financial distress; and (2) President Brown sent an

email to students, on March 23, 2018, stating that merger negotiations had
broken off, but that “Mount Ida remained a top 30 school in the region,”
without divulging any information about the school’s financial health. Am.
Compl. ¶¶ 68, 79, 88. Plaintiffs do not allege that either statement was

untrue.
In response, plaintiffs aver that “Mount Ida’s withholding of
information regarding its financial distress is the fraud alleged.” Opp’n to
College at 15 (emphasis in original); see also Nei v. Boston Survey

Consultants, Inc., 388 Mass. 320, 322 (1983) (“[A] partial disclosure or . . .
a half truth . . . may be tantamount, under certain conditions, to a falsehood
if there is no further expatiation.”). In other words, plaintiffs assert fraud by
omission, which “requires both concealment of material information and a
duty requiring disclosure.” Sahin v. Sahin, 435 Mass. 396, 402 n.9 (2001).

But plaintiffs fail to make out such a claim.
Mount Ida’s audited financial disclosures, which plaintiffs do not
allege were inaccurate, were publicly available.6 See College Mem., Exs. B,
C. These disclosures revealed that Mount Ida had been operating at a deficit

since 2015. Id. at 5. Although plaintiffs allege that defendants reported to
NEASC in 2017 that “Mount Ida was financially stable,” Am. Compl. ¶ 26, the
October 2017 NEASC report reviewed Mount Ida’s finances and specifically

noted that Mount Ida “has produced deficits which is making it difficult for
the College to support its mission,” id., Ex. D at 29. And while plaintiffs
allege that defendants “intentionally omitted their merger talks with Lasell
College from their Self-Study report to NEASC,” Am. Compl. ¶¶ 69, 80, 89,

the Self-Study report also includes Mount Ida’s financials and states, in
particular, that “[t]he financial plan projected several years of operating
deficits,” Brown Mem. (Dkt # 25), Ex. 1 at 60.7 Even assuming Mount Ida’s

6 Plaintiffs provide no support for their contention that “it is
incredulous . . . [to] argue that college students should have done
independent research to find these financial statements, interpret them, and
make decisions based on them.” Sur-Reply to College (Dkt # 50) at 3.

7 Also, as Brown points out, the statement is directed at NEASC, not
plaintiffs. See Brown Mem. at 18.
looming insolvency was material and concealed by defendants, plaintiffs fail
to allege an actionable duty to disclose, including, as described below, any

breach of a fiduciary duty.8 See Knapp v. Neptune Towers Assocs., 72 Mass.
App. Ct. 502, 507 (2008) (“A duty to disclose exists where ‘(i) there is a
fiduciary or other similar relation of trust and confidence, (ii) there are
matters known to the speaker that he knows to be necessary to prevent his

partial or ambiguous statement of the facts from being misleading, or (iii)
the nondisclosed fact is basic to, or goes to the essence of, the transaction.’”).
Plaintiffs’ claims of fraud, negligent misrepresentation, and fraud in the

inducement therefore fail as a matter of law.9
Breach of Fiduciary Duty
Plaintiffs allege that defendants breached a fiduciary duty owed to
them by, again, failing to disclose Mount Ida’s financial woes and by sharing

8 While plaintiffs argue that the existence of the financial statements
did not fulfill defendants’ duty to disclose, they fail to articulate any duty of
disclosure that defendants owed to them. See Sur-Reply to College at 3.

9 Having so concluded, the court need not reach the issue of whether
plaintiffs have satisfied the heightened pleading standard required by Fed.
R. Civ. P. 9(b), see Alt. Sys. Concepts, Inc. v. Synopsys, Inc., 374 F.3d 23, 29
(1st Cir. 2004) (Under Rule 9(b), “the pleader usually is expected to specify
the who, what, where, and when of the allegedly false or fraudulent
representation.”), or whether they sufficiently allege fraud or
misrepresentation “as to each defendant,” Goebel v. Schmid Bros., 871 F.
Supp. 68, 73 (D. Mass. 1994).
their sensitive financial and academic information with UMass Dartmouth.
According to the Amended Complaint, because “Mount Ida held a unique

position of influence and trust with its students,” defendants “had a fiduciary
duty to exercise their rights and powers in good faith for the benefit of their
students.” Am. Compl. ¶¶ 96-97.
“A fiduciary relationship is one founded on the trust and confidence

reposed by one party in the integrity and fidelity of another.” Estate of
Moulton v. Puopolo, 467 Mass. 478, 492 (2014). “Although some fiduciary
relationships . . . are created by law, others arise from the nature of the

parties’ interactions.” Doe v. Harbor Sch., Inc., 446 Mass. 245, 252 (2006).
Where, as here, “the fiduciary relationship is not one created by law, the
existence of the relationship ordinarily is a mixed question of law and fact
for which the party asserting the relationship bears the burden.” Id.

(emphasis added).
Plaintiffs’ breach of fiduciary duty claim, however, fails as a matter of
law.10 Massachusetts courts have consistently held that no fiduciary

10 The court assumes, without deciding, that plaintiffs have standing to
bring a breach of fiduciary duty claim. See Lopez v. Medford Cmty. Ctr., Inc.,
384 Mass. 163, 167 (1981) (“Notwithstanding the Attorney General’s
exclusive and discretionary role as protector of the public interest in the
efficient and lawful operation of charitable corporations, a private plaintiff
possesses standing to assert interests in such organizations which are
distinct from those of the general public.”); Harvard Climate Justice Coal.
relationship exists between a student and his or her college. See Williamson
v. Bernstein, 1996 WL 1185104, at *3 (Mass. Super. Feb. 20, 1996) (rejecting

“plaintiff’s assertion that a fiduciary relationship existed between her and
[Fitchburg State] College because she was a student there”); Morris v.
Brandeis Univ., 2001 WL 1470357, at *6 (Mass. Super. Sept. 4, 2001), aff’d,
60 Mass. App. Ct. 1119 (2004) (same).11 On the other hand, Massachusetts

courts have at times found the existence of a valid contractual relationship
between student and college, see Morris, 60 Mass. App. Ct. 1119 (Table), or
the existence of a “special relationship” between students and their college,

see Nguyen, 479 Mass. at 453. A special relationship, however, is not a
fiduciary one. See Knelman v. Middlebury Coll., 570 F. App’x 66, 68 (2d Cir.
2014) (“While schools, colleges, and educators assume the responsibility of

v. President & Fellows of Harvard Coll., 90 Mass. App. Ct. 444, 446 (2016)
(“Special standing applies only where ‘the claim has arisen from a personal
right that directly affects the individual member’ of a charitable
organization.”), quoting Weaver v. Wood, 425 Mass. 270, 276 (1997).

11 Plaintiffs do not cite any cases to the contrary, and their reliance on
Dzung Duy Nguyen v. Massachusetts Inst. of Tech., 479 Mass. 436 (2018),
is inapposite. In Nguyen, the Supreme Judicial Court (SJC) held that “a
university has a special relationship with a student and a corresponding duty
to take reasonable measures to prevent his or her suicide” in limited
circumstances, which were not satisfied in that case. Id. at 453, 458. While
the SJC noted that “[u]niversities are clearly not bystanders or strangers in
regards to their students” and that they “have special relationships with their
students regarding athletics and other potentially dangerous activities,” id.
at 450, it did not find that these duties amount to a fiduciary relationship.
educating their students, the law does not recognize the existence of a special
relationship for the purposes of a breach of fiduciary duty claim.”). It follows

that neither Mount Ida nor, correspondingly, the remaining defendants,
owed a fiduciary duty to plaintiffs. To the extent that a fiduciary duty was
imposed on defendants, it was owed to Mount Ida as a corporate entity. See
Estate of Moulton, 467 Mass. at 492 (“Directors of a corporation stand in a

fiduciary relationship to that corporation and have a duty to protect its
interests ‘above every other obligation.’”); Cecconi v. Cecco, Inc., 739 F.
Supp. 41, 45 (D. Mass. 1990) (“Under Massachusetts law, it is a ‘basic

principle’ that officers and directors owe a fiduciary duty to protect the
interests of the corporation.”).
Breach of Contract
Plaintiffs allege that in the alternative defendants breached a contract

between them and Mount Ida. “Under Massachusetts law, a breach of
contract claim requires the plaintiff to show that (1) a valid contract between
the parties existed, (2) the plaintiff was ready, willing, and able to perform,
(3) the defendant was in breach of the contract, and (4) the plaintiff

sustained damages as a result.” Bose Corp. v. Ejaz, 732 F.3d 17, 21 (1st Cir.
2013), citing Singarella v. City of Bos., 342 Mass. 385, 387 (1961). At a
minimum, the plaintiff must “explain what obligations were imposed on each
of the parties by the alleged contract.” Buck v. Am. Airlines, Inc., 476 F.3d
29, 38 (1st Cir. 2007), quoting Doyle v. Hasbro, Inc., 103 F.3d 186, 195 (1st

Cir. 1996).
According to the Amended Complaint, plaintiffs “fulfilled their
contractual obligations to Mount Ida by remitting tuition payments . . . for
the purpose of receiving a degree in their selected field” and “complied with

all their financial and academic obligations.” Am. Compl. ¶¶ 107-108.
Defendants, in turn, “breached their contractual duty by failing to provide
the education [that plaintiffs] bargained for and paid for.” Id. ¶ 109.12 These

bare allegations do not suffice for a breach of contract claim. See Brooks v.
AIG SunAmerica Life Assur. Co., 480 F.3d 579, 586 (1st Cir. 2007)
(“Plaintiffs . . . must do more than allege, in conclusory fashion, that the
defendant breached the contract, by describing, with ‘substantial certainty,’

the specific contractual promise the defendant failed to keep.”); Doyle, 103
F.3d at 195 (“Conclusory statements that ‘Hasbro and its executives failed to
meet their contractual requirement’ are insufficient to satisfy the pleading
requirements.”) (citation omitted). Plaintiffs fail to identify, among other

things, the specific terms of the purported contract, when it was formed, and

12 The Amended Complaint also specifically alleges, however, that “a
contract was formed between [plaintiffs] and Mount Ida,” not any of the
other defendants. Am. Compl. ¶ 106 (emphasis added).
who negotiated it.13 Merely paying tuition in exchange for an education does
not create a contract.14 Ultimately, the lack of specificity is fatal to plaintiffs’

breach of contract claim.15
Mass. Gen. Laws Chapter 93A
Finally, plaintiffs allege that defendants engaged in unfair and
deceptive practices in violation of Mass. Gen. Laws ch. 93A, § 9. According

to the Amended Complaint, defendants acted unfairly and deceptively by
breaching the Memorandum of Understanding with Lasell College and
subsequently mischaracterizing the failed merger, by disclosing plaintiffs’

13 Plaintiffs contend that, at a minimum, an implied contract was
formed. See Jackson v. Action for Bos. Cmty. Dev., Inc., 403 Mass. 8, 9
(1988) (“A contract implied in fact may be found to exist from the conduct
and relations of the parties.”), quoting LiDonni, Inc. v. Hart, 355 Mass. 580,
583 (1969); Anthes v. New York Univ., 2018 WL 1737540, at *13 (S.D.N.Y.
Mar. 12, 2018) (“When a student enrolls at a university, an implied contract
arises: if the student complies with the terms prescribed by the university,
she will obtain the degree she seeks.”) (citations omitted). Their reliance on
Anthes, however, is misguided because there, the court found that the breach
of contract claim was “foreclosed by the lack of specificity as to the agreement
between the parties.” Id. Here, plaintiffs similarly fail to make sufficient
allegations of an implied contract.

14 Moreover, as defendants point out, plaintiffs received a semester of
education for every semester for which they paid. College Mem. at 13 n.11.

15 Having so concluded, the court need not address whether “the
corporate veil should be pierced to confer liability” on Brown for breach of
contract. Opp’n to Brown (Dkt # 38) at 6.
academic and financial information to UMass Dartmouth, and by failing to
inform plaintiffs about Mount Ida’s financial distress.

Chapter 93A prohibits “unfair or deceptive acts or practices in the
conduct of any trade or commerce.” Mass. Gen. Laws ch. 93A, § 2(a). It is
true that “[a]n entity’s status as a charitable corporation is not, in and of
itself, dispositive of the issue” of whether Chapter 93A applies, but “[i]n most

circumstances, a charitable institution will not be engaged in trade or
commerce when it undertakes activities in furtherance of its core mission.”
Linkage Corp. v. Trustees of Bos. Univ., 425 Mass. 1, 23, 26 (1997).

Similarly, activities that are “purely incidental to the university’s educational
mission” are generally not subject to Chapter 93A. Id. at 25.
Plaintiffs contend that defendants engaged in “trade or commerce” by,
among other things, “[o]ffering for sale a unique product” and “[c]ompeting

in the marketplace with other schools” through “marketing and advertising.”
Am. Compl. ¶ 111.16 However, these actions were in furtherance of Mount
Ida’s core educational mission or were, at least, incidental to that mission.17

16 The statute defines “trade” and “commerce” to “include the
advertising, the offering for sale, rent or lease, the sale, rent, lease or
distribution of any services and any property.” Mass. Gen. Laws ch. 93A,
§ 1(b).

17 Plaintiffs also argue that “[s]uch an analysis is a factual one”
inappropriate for this stage of the litigation. Sur-Reply to College at 9. The
Mount Ida did indeed compete with other schools to provide a “unique
product,” an education. Through its marketing, advertising, and offering of

scholarships, Mount Ida was able to recruit, enroll, and educate students. Its
attempted merger with Lasell College and subsequent transfer of student
data to UMass Dartmouth also served to further the school’s core mission of
providing and advancing student education. Plaintiffs’ Chapter 93A claim

therefore fails because defendants were not engaged in “trade or commerce”
for purposes of the statute.18

court disagrees. See Brodsky v. New England Sch. of Law, 617 F. Supp. 2d
1, 7 (D. Mass. 2009) (“Because the Court concludes that NESL was not
engaged in ‘trade or commerce’ for the purpose of Chapter 93A, Brodsky’s
claims under that statute will be dismissed[.]”); Thornton v. Harvard Univ.,
2 F. Supp. 2d 89, 95 (D. Mass. 1998) (“Harvard’s administration of student
financial aid is not ‘trade or commerce’ for purposes of chapter 93A.”).

18 Having dismissed all of plaintiffs’ claims, the court need not reach
defendants’ arguments about whether the Board of Trustees is a proper
party, whether individual unpaid trustees like Reiss are entitled to immunity
under Mass. Gen. Laws ch. 231, § 85K and the federal Volunteer Protection
Act, or whether plaintiffs have sufficiently pled allegations to support liability
as to each defendant, not just Mount Ida.
ORDER
For the foregoing reasons, defendants’ motions to dismiss are

ALLOWED with prejudice.19 The clerk will enter judgment for defendants
and close the case.
SO ORDERED.
/s/ Richard G. Stearns _____
UNITED STATES DISTRICT JUDGE

19 The court will not afford plaintiffs another opportunity to amend
their Amended Complaint.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10197725. Public record. Not legal advice.