Nouri v. University of Scranton

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF PENNSYLVANIA

MICHAEL NOURI, on behalf of

himself and all others similarly situated,

CIVIL ACTION NO. 3:23-CV-01362

Plaintiff,

(MEHALCHICK, J.)

v.

UNIVERSITY OF SCRANTON,

Defendant.

MEMORANDUM

Plaintiff Michael Nouri (“Plaintiff”) initiated this lawsuit on behalf of himself and all

others similarly situated on August 16, 2023, by filing a complaint (“the Complaint”) against

the Defendant University of Scranton (“the University”) alleging a breach of implied contract

claim or, in the alternative, an unjust enrichment claim. (Doc. 1). Presently before the Court

is a motion to dismiss filed by the University. (Doc. 10). For the following reasons, the motion

shall be DENIED. (Doc. 10).

I. BACKGROUND AND PROCEDURAL HISTORY

The following background is taken from the Complaint.1 (Doc. 1). At all relevant

times, Plaintiff was a tuition-paying student at the University. (Doc. 1, ¶ 4). In March 2020,

in response to the Covid-19 pandemic, the University’s campus shut down and the school

1 In deciding a motion to dismiss, a court is generally limited to the allegations set forth

in the pleadings, however, it may also consider documents attached to the complaint and

matters of public record. City of Edinburgh v. Pfizer, Inc., 754 F.3d 159, 166 (3d Cir. 2014).

Included in the Complaint are various links to the University’s website, its Undergraduate

and Graduate Course Catalog for 2019-2020, and its Viewbook for the Summer of 2019. (Doc.

1, ¶¶ 22 n.1, 24 n.3-8, 29 n.9).

transitioned to online-only education for the remainder of the semester. (Doc. 1, ¶ 6).

According to the Complaint, as a result of this, all on-campus education, services, and

amenities were no longer available to Scranton students for the remainder of the Spring 2020

semester. (Doc. 1, ¶ 7). Despite students’ inability to access on-campus benefits, including

housing, educational and recreational facilities, and dining, the University refused to provide

students with a pro-rated refund for the tuition and fees they paid to attend. (Doc. 1, ¶¶ 8, 39).

This includes a mandatory fee used to fund “on-campus services and facilities offered by [the

University] to its students.” (Doc. 1, ¶¶ 36-37). These services and facilities include student

health programming, wellness facilities, studios, study spaces, fitness centers, and student

events. (Doc. 1, ¶ 42).

Plaintiffs assert that the University retained tuition and fees for services not provided

to students. (Doc. 1, ¶ 12). Seeking restitution, compensatory damages, and all other forms of

equitable monetary relief, on August 16, 2023, Plaintiff filed this lawsuit on behalf of himself

and other alleged student class members. (Doc. 1, at 25-26). Plaintiff alleges a breach of an

implied contract by claim and, in the alternative, an unjust enrichment claim against the

University. (Doc. 1, ¶¶ 65-73, 74-84).

On October 11, 2023, the University filed the instant motion to dismiss. (Doc. 10). On

October 25, 2023, the University filed a brief in support of their motion. (Doc. 13). On

December 8, 2023, Plaintiff filed a brief in opposition. (Doc. 16). On December 22, 2023, the

University filed a reply brief. (Doc. 17). Accordingly, the motion is fully briefed and ripe for

discussion. (Doc. 13; Doc. 16; Doc. 17).

II. LEGAL STANDARD

Rule 12(b)(6) of the Federal Rules of Civil Procedure authorizes a defendant to move

to dismiss for “failure to state a claim upon which relief can be granted.” Fed. R. Civ. P.

12(b)(6). “Under Rule 12(b)(6), a motion to dismiss may be granted only if, accepting all well-

pleaded allegations in the complaint as true and viewing them in the light most favorable to

the plaintiff, a court finds the plaintiff’s claims lack facial plausibility.” Warren Gen. Hosp. v.

Amgen Inc., 643 F.3d 77, 84 (3d Cir. 2011) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544,

555-56 (2007)). Although a court must accept the factual allegations in a complaint as true, it

is not compelled to accept “unsupported conclusions and unwarranted inferences, or a legal

conclusion couched as a factual allegation.” Morrow v. Balaski, 719 F.3d 160, 165 (3d Cir.

2013) (quoting Baraka v. McGreevey, 481 F.3d 187, 195 (3d Cir. 2007)). Additionally, a court

need not assume that a plaintiff can prove facts that the plaintiff has not alleged. Associated

Gen. Contractors of Cal. v. California State Council of Carpenters, 459 U.S. 519, 526 (1983).

In Ashcroft v. Iqbal, the United States Supreme Court held that, when considering a

motion to dismiss, a court should “begin by identifying pleadings that, because they are no

more than conclusions, are not entitled to the assumption of truth.” 556 U.S. 662, 679 (2009).

“Threadbare recitals of the elements of a cause of action, supported by mere conclusory

statements, do not suffice.” Iqbal, 556 U.S. at 678. “Factual allegations must be enough to

raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. In evaluating a

motion to dismiss, a court may consider the facts alleged on the face of the complaint, as well

as “documents incorporated into the complaint by reference, and matters of which a court

may take judicial notice.” Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007).

III. DISCUSSION

The University argues for the dismissal of Plaintiff’s breach of contract and unjust

enrichment claims. (Doc. 13, at 2). From the University’s perspective, Plaintiff was never

promised the “on-campus” experience he alleges he was deprived of. (Doc. 13, at 2). The

University also asserts that its reservation of rights permitted it to move classes online and

that Plaintiff ratified and accepted Scranton’s modification by continuing to attend the

University even after his education moved online. (Doc. 13, at 2). Alternatively, the

University contends that Plaintiff’s claim for tuition must be dismissed because he received

the benefit he paid for. (Doc. 13, at 2). Arguing against dismissal, Plaintiff maintains that he

has stated both a breach of an implied contract claim and, in the alternative, an unjust

enrichment claim. (Doc. 16, at 2). Plaintiff also refutes the University’s contentions regarding

its reservation of rights, Plaintiff’s ratification, and Plaintiff’s receipt of the benefit of his

tuition. (Doc. 16, at 2). For the following reasons, the Court agrees with Plaintiff and will

DENY the University’s motion to dismiss. (Doc. 10).

A. BREACH OF IMPLIED CONTRACT

“The student-college relationship is essentially contractual in nature.” Mangla v. Brown

Univ., 135 F.3d 80, 83 (1st Cir. 1998). Under Pennsylvania law, a valid and binding contract

exists if the parties (1) manifest an intention to be bound by the agreement; (2) the terms of

the agreement are sufficiently definite; and (3) there is consideration by both parties. ATACS

Corp. v. Trans World Commc'ns, Inc., 155 F.3d 659, 666 (3d Cir. 1998). To state a breach of

contract claim, Plaintiff must allege “(1) the existence of a contract, including its essential

terms, (2) a breach of a duty imposed by the contract, and (3) resultant damages.” Genomind,

Inc. v. UnitedHealth Grp. Inc., No. CV 21-373, 2021 WL 3929723, at *6 (E.D. Pa. Sept. 1, 2021)

(quoting Gorski v. Smith, 812 A.2d 683, 692 (Pa. Super. Ct. 2002)). The essential elements of

an implied contract, as at issue here, are the same as an express contract, “except the contract

is implied through the parties’ conduct, rather than expressly written.” Enslin v. The Coca-Cola

Co., 136 F.Supp.3d 654, 675 (E.D. Pa. 2015). In the context of colleges and universities, the

Third Circuit has held that ordinary Pennsylvania contract law applies. See Hickey v. Univ. of

Pittsburgh, 81 F.4th 301, 311-12 (3d Cir. 2023) (“Pennsylvania has not jettisoned ordinary

contract principles permitting implied contracts in cases where, as here, students allege that a

university failed to perform a specific undertaking”).

1. The University’s Promise of an “On-Campus” Experience

Plaintiff’s implied breach contract claim is premised on his allegation that he was

deprived of the “on-campus” experience the University promised him. (Doc. 1, ¶¶ 65-73). The

University argues that no such promise existed, stating “Plaintiff has failed to plead that [the

University] promised an exclusively ‘on-campus experience’ in sufficiently definite terms to

form a valid and enforceable contract.” (Doc. 13, at 7). Plaintiff responds that the University

“promised a robust on-campus educational environment, for which students prepaid

substantial tuition and fees, but [the University] failed to live up to its end of the bargain,”

and that this constitutes a breach of implied contract. (Doc. 16, at 9).

In making their arguments, both parties rely on the Third Circuit’s recent decision in

Hickey v. University of Pittsburgh.2 81 F.4th 301 (3d Cir. 2023). In Hickey, the Third Circuit

2 The Third Circuit’s decision in Hickey is aligned with other Circuits that have

addressed similar claims. See Rynasko v. New York University, 63 F.4th 186, 197 (2d Cir. 2023);

Jones v. Administrators of Tulane Educational Fund, 51 F.4th 101, 114 (5th Cir. 2022); Gociman

v. Loyola University of Chicago, 41 F.4th 873, 884 (7th Cir. 2022); Hernandez v. Illinois Institute of

Technology, 63 F.4th 661, 668 (7th Cir. 2023); Delisle v. McKendree University, 73 F.4th 523, 528

(7th Cir. 2023); Shaffer v. George Washington University, 27 F.4th 754, 763 (D.C. Cir. 2022).

reviewed similar breach of contract claims stemming from plaintiff-students’ allegations that

they were deprived of the on-campus experiences they had contracted for with their

defendant-universities due to the Covid-19 pandemic. 81 F.4th at 307. The Third Circuit

found that the plaintiff-students had sufficiently pled their breach of contract claims because

“allegations of frequent references to in-person instruction in university publications, the

schools' tradition of in-person instruction, and their different marketing and price structure

for online programming support a reasonable inference that the parties impliedly contracted

for in-person education, and that is sufficient to state a claim for breach of contract.” Hickey,

81 F.4th at 314. It is the University’s position that Plaintiff has failed to allege these elements

and thus has failed to allege that an implied contract exists. (Doc. 13, at 12-13). To distinguish

this case from Hickey, the University argues that while the University’s “marketing materials

emphasized the benefits of an education at [the University], it made no promises of an in-

person education."3 (Doc. 13, at 16). Further, the University contends that Plaintiff has failed

to allege that he was deprived of on-campus benefits such as career development, counseling

services, physical recreation, and musical performances. (Doc. 13, at 16-17). Plaintiff

responds that the University “made a specific promise to provide an in-person education and

on-campus experiences, which can be inferred through: ‘(1) [the University’s] publications

touting the benefits of the ‘on-campus experience’; (2) [its] longstanding pre- pandemic

tradition of in-person education; and (3) the separate marketing and pricing of online and in-

person programs.’” (Doc. 16, at 12). The Court will address each of these elements in turn.

3 The University preserves its position that Hickey was wrongly decided as well as its

right to challenge the Hickey decision upon appeal. (Doc. 13, at 13 n.4).

Looking first to the University’s publications, Plaintiff alleges that the University’s

marketing materials tout the “integral role that campus life and co-curricular engagement

have” on an education at the University. (Doc. 1, ¶¶ 30-32). Plaintiff also alleges that the

University advertises a “Twenty-Four/Seven College Experience” that features “a full

calendar of activities and more than 900 events” and “more than 80 student clubs and

organizations.” (Doc. 1, ¶ 30). The Complaint further suggests that the University promotes

its location as “a central element of the academic experience” at the University, largely

through claims that the University is located in a “vibrant college town,” “a mecca for outdoor

activities,” and “a Great Place to Call Home.” (Doc. 1, ¶ 33).

For the purposes of the instant motion, when “viewed in context with [Plaintiff’s]

payment of tuition and registration for in-person classes prior to the campus closures, these

representations support a reasonable inference that in-person education and access to campus

resources were among the benefits of the matriculation bargain.” Hickey, 81 F.4th at 312-13;

see Faw v. Villanova University, No. CV 23-3897, 2024 WL 3237601, at *3 (E.D. Pa. June 28,

2024) (finding that plaintiff-student had sufficiently alleged breach of an implied contract

against defendant-university for failing to provide an on campus experience in part because

plaintiff-student alleged that the defendant-university had promoted its campus’s location,

scenery, and accessibility to Philadelphia on its website). Thus, the Court finds a review of

the first Hickey element weighs in favor of Plaintiff’s claim.

Looking next to whether Plaintiff has alleged a tradition of in-person education at the

University, the Complaint states that the University “had a longstanding tradition” of offering

in-person courses prior to the Covid-19 pandemic. (Doc. 1, ¶ 21); see Hickey, 81 F.4th at 312-

13. According to the Complaint, because the University alerts students registering for classes

which courses are “Web Course Section[s],” “students make informed choices about whether

to spend their tuition dollars on in-person or online modes of course delivery.” (Doc. 1, ¶ 23).

By offering both teaching formats, Plaintiff avers that the University “created the reasonable

expectation that whichever format a student chooses, that student will receive instruction in

that format for the entirety of the semester.” (Doc. 1, ¶¶ 3, 22, 25; Doc. 16, at 7-8). For the

purposes of the instant motion to dismiss, this inference is aligned with the University’s

“tradition of providing in-person education” to students opting to take classes on-campus. See

Shaffer v. George Washington Univ., 27 F.4th 754, 764 (D.C. Cir. 2022) (recognizing a

defendant-university's “historic practice” of on-campus education as supporting a student-

plaintiff’s allegation of implied contract for in-person instruction).

Courts have found that even when a university has previously offered online courses,

allegations that the university has had a “historic practice” of offering an on-campus

education is sufficient to support an implied breach of contract claim in this context. Shaffer,

27 F.4th at 764; see Faw, 2024 WL 3237601, at *4 (finding defendant-university’s tradition of

providing in-person education sufficient to support their implied breach of contract claim,

even where the university-defendant also previously offered online course). Thus, because

Plaintiff alleges that he had a reasonable expectation of engaging in an on-campus experience

when he chose to enroll in a fully in-person curriculum, and that the University had a tradition

of offering in-person classes, Plaintiff’s pleading of this element supports his breach of an

implied contract claim. (Doc. 16, at 8); see Jones v. Administrators of Tulane Educ. Fund, 51 F.4th

101 (5th Cir. 2022) (“we draw the reasonable inference from the factual allegations in the []

Complaint that Tulane has established a historic practice of providing in-person instruction

to students who pay the cost of residential tuition.”); see Faw, 2024 WL 3237601, at *4.

Lastly, looking to the separate marketing and pricing of online and in-person

programs at the University, the Complaint contains no allegation that online and on-campus

programs were priced differently. (Doc. 1). However, Plaintiff points out that “Hickey did not

establish a mandatory set of elements for tuition refund claims, but endorsed a non-exhaustive

list of factors from which a promise for in-person education can be inferred.” (Doc. 16, at 8)

(citing Hickey, 81 F.4th at 312). Plaintiff concludes that “even where a university does not

price online and in-person tuition differently, [courts have found] student-plaintiffs still stated

a claim for breach of implied contract.” (Doc. 16, at 14); see Hickey, 81 F.4th at 305-06; see also

Rynasko v. New York Univ., 63 F.4th 186, 199 (2d Cir. 2023) (stating “we cannot conclude that

a differential between in-person and online classes is a necessary condition for plausibly

alleging an implied contract for in-person courses and services”).

While Plaintiff does not allege a price differential between in-person and online

learning at the University, allegations in the Complaint do support Plaintiff’s argument that

the University markets its on-campus experience differently than its online-only degree

programs. (Doc. 1, ¶¶ 24-27). According to the Complaint, the University “advertises that it

offers online advanced degree programs, it makes no such representations regarding its

undergraduate degree program,” and “recognizes that in-person and online instructional

modes offer different educational experiences. [The University] alerts students who are

considering taking an LMS course that they should go to the Desire2Learn web page to learn

‘what you need to know before taking an online course.’” (Doc. 1, ¶¶ 24, 25). Further, the

Complaint states “several of [the University’s] departments require graduate students to

choose between in-person and online instructional modes upon their initial application to the

university.” (Doc. 1, ¶ 25). These allegations support that the University markets online and

on-campus learning differently.

Having assessed the three elements detailed in Hickey, the Court finds Plaintiff has

sufficiently alleged the University promised him an on-campus experience and that he has

stated a claim for breach of an implied contract. 81 F.4th at 313. The University’s motion to

dismiss is DENIED on this basis. (Doc. 18); see Salerno v. Fla. S. Coll., 488 F.Supp.3d 1211,

1217 (M.D. Fla. 2020) (denying motion to dismiss in Covid-19 tuition refund dispute because

defendant-school's publications and materials “touted its many resources and facilities -- all

of which were located on the campus thereby implying in-person participation”); see also

Durbeck v. Suffolk Univ., 547 F. Supp. 3d 133, 146 (D. Mass. 2021) (denying defendant-

university’s motion to dismiss where plaintiff-students “state[d] a plausible claim for breach

of an implied-in-fact contract for an in-person experience for the entire spring 2020

semester.”); see also Doe v. Univ., No. 20-1264, 2020 WL 7634159, at *2 (C.D. Ill. Dec. 22,

2020) (“Courts have largely denied universities' motions to dismiss on nearly identical breach

of contract claims because they found there were sufficient facts to allege a contract for in-

person instruction based on university handbooks, catalogs, and brochures”).

2. The University’s Reservation of Rights

The University argues that its reservation of rights permits it to move classes online.

(Doc. 13, at 18-19). According to the University, although the Hickey court found the

“language of [the defendant-university’s] reservation of rights was not sufficiently specific to

cover a transition to solely online coursework,” the language of the University’s reservation

of rights is “broader and clearer,” and allows the University “to change the arrangement,

scheduling, credit, or content of courses; and to change the fees listed in this catalog.” 4 (Doc. 13,

at 19; Doc. 13-1, at 2); 81 F.4th at 313 n.8 (emphasis added). Thus, as the University sees it,

shifting courses to an online format “is a change to the ‘arrangement’ or ‘scheduling’ of classes

and was not included in the reservation of rights [previously] considered by the Third Circuit

[in Hickey].” (Doc. 13, at 14). The University also asserts that it “expressly reserved the right

to limit students’ physical access to campus if deemed to be in the best interests of the students

or the university.” (Doc. 13, at 19; Doc. 13-1, at 2); see Smith v. Univ. of Pennsylvania, 534 F.

Supp. 3d 463, 474 (E.D. Pa. 2021) (holding that reservation of rights to "suspend normal

operations" due to emergencies included a move to online-only format and did "not promise

a refund or credit for time lost").

According to Plaintiff, the University’s reservation of rights does not bar his claims.

(Doc. 16, at 19). Pointing again to Hickey, Plaintiff states “[t]he Third Circuit emphasized that

unless a reservation of rights clause ‘specifically address[es] emergencies or other force

majeure events,’ a reservation of rights clause cannot ‘as a matter of law,’ allocate ‘the entire

financial consequences of the pandemic change to online classes to the students.’” (Doc. 16,

at 20) (internal citations partially omitted); 81 F.4th at 313 n.8. Addressing a case cited by the

University, Smith v. University of Pennsylvania, Plaintiff suggests that for a court to bar a tuition

refund claim based on a defendant-university’s reservation of rights, said reservation of rights

must explicitly address suspension of on-campus operations due to an emergency and must

4 The reservation of rights implicated in Hickey stated, in relevant part: “The

information in this [Course] bulletin is subject to change” including “the status of policies,

programs, descriptions of curricula, or other information in this bulletin.” 81 F.4th at 313

n.8.

contemplate “the cancellation of classes and/or the full or partial closure of certain areas of

the University.”5 (Doc. 16, at 21); 534 F. Supp. 3d at 474.

At this early stage of the litigation, the Court finds the language of the reservation of

rights to be too ambiguous as applied in this context to warrant dismissal. See Canters Deli Las

Vegas, LLC v. FreedomPay, Inc., 460 F. Supp. 3d 560, 569 (E.D. Pa. 2020) (providing “if the

contract is determined to be ambiguous, then the interpretation of the contract is left to the

factfinder”). As argued by Plaintiff, when courts have previously dismissed similar claims as

barred by a reservation of rights, the implicated reservation of rights have specifically

anticipated suspension of on-campus activities due to emergency circumstances. See Smith,

534 F. Supp. 3d at 474. Here, while the University’s reservation of rights does state that the

University has “the right to refuse to admit or readmit any student at any time should it be

deemed necessary in the interest of the student or of the University to do so,” the reservation

of rights does not unambiguously allow the University to shift the entirety of its benefits to an

online format or anticipate any emergency circumstances which would permit the University

to do so. (Doc. 13-2). And, while the University reserves the right “to change the information,

regulations, requirements and procedures announced in [the course] catalog,” the reservation

of rights does not unambiguously permit the University “to fail to offer the [bargained for]

services and still charge for [them].” (Doc. 13-2); Jones, 51 F.4th at 114. Because finding the

5 The relevant portion of reservation of rights implicated in Smith reads as follow:

Although Penn normally never stops operating, emergencies such as severe

weather conditions may sometimes result in the cancellation of classes and/or

the full or partial closure of certain areas of the University. Decisions affecting

work schedules and class cancellation are made by the Executive Vice President

in consultation with the Provost.

534 F. Supp. 3d at 474.

University’s reservation of rights bars Plaintiff’s claims would require this Court to interpret

its terms, and because the Court would be better suited to do so after development of a record

in this case, the Court will DENY Plaintiff’s motion to dismiss on this basis. (Doc. 18); see

Shaffer, 27 F.4th at 764-65 (denying a motion to dismiss plaintiff-student’s contract claims

where “the reservation language does not specifically address emergencies or other force

majeure events.”); see also Metzner v. Quinnipiac Univ., 528 F. Supp. 3d 15, 37 n.7 (D. Conn.

2021) (finding a defendant-university’s argument that its reservation of rights barred breach

of contract claims premature and better resolved after factual development).

3. The University’s Impossibility, Ratification, and Modification Arguments

The University argues that even if an implied contract for on-campus instruction did

exist between Plaintiff and the University, the University was excused from performance by

impossibility when then Pennsylvania Tom Governor Wolf issued his stay-at-home order.

(Doc. 13, at 20-21). The University also asserts that it proposed a modification to any existing

implied contract for on-campus learning "by offering to continue classes in an online-only

learning environment due to the COVID-19 pandemic." (Doc. 13, at 20). Thus, the University

avers that Plaintiff "could have sought to rescind the existing contract or otherwise objected

to this proposed modification, such as by timely requesting a refund of tuition or declining to

resume courses until [the University] reinstated on-campus classes.” (Doc. 13, at 22).

Alternatively, the University argues that if Plaintiff did not accept a modification, he ratified

it by continuing to take classes and receive credit. (Doc. 13, at 20-21). It is therefore the

University’s position that Plaintiff “made no effort to disclaim the benefits (i.e., his education

or academic credits) and continued to reap those rewards during and after the conclusion of

the Spring 2020 semester.” (Doc. 13, at 24).

Plaintiff responds that the switch to online learning was not a proposed modification,

but instead “a unilateral and abrupt change to the parties’ implied contract that reduced [the

University’s] obligations but did nothing to alter Plaintiff’s obligations or compensate him

(and other students) for the change in terms,” which Plaintiff alleges lacked consideration.

(Doc. 16, at 17). Plaintiff also argues that he did not waive his right to sue, nor did he ratify

the contract and that none of the allegations in the Complaint support that he had an

opportunity to rescind, and “any rejection of the online format by a student would leave them

with no refund and no instruction or credits,” as the partial refund deadline had passed. (Doc.

16, at 17-18). Plaintiff therefore argues that his continued class attendance amidst the

pandemic did not constitute a student’s knowing waiver of the right to sue and that,

regardless, waiver is a question of fact for the jury. (Doc. 16, at 18-19). The Court agrees with

Plaintiff. See Meng v. New Sch., 686 F.Supp.3d 312, 322 (S.D.N.Y. 2023) (rejecting defendant’s

waiver argument because the only fact in support was plaintiff’s continued attendance, which

is “equivocal at best and is not necessarily inconsistent with an intent to later sue for damages”

. . . “Given the factual nature of the waiver inquiry, the Court finds dismissal on this basis to

be inappropriate at this stage of the case”).

In Pennsylvania, a contract “may be modified by subsequent agreement through

words, written or oral, or by conduct of the parties.” In re Labrum & Doak, No. CIV. A. 98-

4780, 2000 WL 1204646, at *7 (E.D. Pa. Aug. 23, 2000). “Acceptance of a modification ‘may

be implied from a course of conduct in accordance with its existence’ after notice of the

impending modifications and an opportunity to accept or reject it.” Camden v. Bucknell Univ.,

No. 4:23-CV-01907, 2024 WL 760232, at *3 (M.D. Pa. Feb. 23, 2024) (internal citations

omitted). Here, it is not apparent from the face of the pleadings that Plaintiff ratified or

accepted any modification to the University’s implied contract. (Doc. 1). A similar scenario

to the one at bar was addressed in Faw v. Villanova University and Camden v. Bucknell University,

where the Eastern and Middle Districts of Pennsylvania respectively held that in cases where

a plaintiff-student’s tuition was paid in full, as Plaintiff alleges it was here, it is “speculative at

best to suggest that students could have opted out of remote instruction in exchange for a

refund or credit toward a future semester,” and “unclear how [the university’s] unilateral

announcement of a transition to remote learning provided the plaintiff a reasonable

opportunity to reject that supposed proposal.” 2024 WL 3237601, at *5 (citing Camden, 2024

WL 760232, at *3). This same applies here. Nothing in the Complaint supports that students

were given the option to opt out of online courses in exchange for a refund. (Doc. 1, ¶ 39); see

Gibson v. Lynn Univ., Inc., 504 F. Supp. 3d 1335, 1343 (S.D. Fla. 2020) (“The Court disagrees

that the issue of ratification is established on the face of the pleadings . . . the pleadings [do

not] show that Plaintiff knew he could reject the contract at any point during the Spring

semester.”). Plaintiff alleges that the deadline for students to receive a tuition refund had

passed by that point in March 2020. (Doc. 1, ¶ 40). Furthermore, waiver and ratification are

generally questions of fact better determined with the benefit of a fully developed record. See

Sabatini v. Its Amore Corp., 455 F. App’x 251, 256 (3d Cir. 2011); see also Meng v. New Sch., 686

F. Supp. 3d 312, 322 (S.D.N.Y. 2023) (“Given the factual nature of the waiver inquiry, the

Court finds dismissal on this basis to be inappropriate at this stage of the case.”).

As for the University’s impossibility defense, in Pennsylvania, if a party's ‘continued

performance of a contract is rendered illegal by a subsequent governmental regulation,’

without the fault of that party, ‘his duty of rendering performance is discharged.’” Faw, 2024

WL 3237601, at *6 (quoting Burkus v. Henshall, 126 A.2d 722, 725 (Pa. 1956)). However, the

applicability of this defense is better determined after discovery, as “discovery is necessary to

clarify the extent to which [the University] was legally barred from performing its alleged

contractual obligations.” Faw, 2024 WL 3237601, at *7. Even with this considered, the

University maintains that the Court may consider an impossibility defense at the motion to

dismiss stage when facts not included in the complaint “involve reference to public

documents.” (Doc. 17, at 7); see Oran v. Stafford, 226 F.3d 275, 289 (3d Cir. 2000). The

University avers that reference to the Covid-19 shutdown meets this criterion. (Doc. 17, at 7).

In response, Plaintiff argues that the University’s assertion of the impossibility defense is

premature because per Federal Rule of Civil Procedure 8, “a complaint need not anticipate

or overcome affirmative defenses.” (Doc. 16, at 11) (quoting Schmidt v. Skolas, 770 F.3d 241,

248-49 (3d Cir. 2014)). Plaintiff further contends that the impossibility defense is not

“apparent on the face of the complaint” because the University “does not point to any

allegations in the Complaint to establish that it was impossible for the university to fully

perform its obligation,” and instead “improperly inserts facts.” (Doc. 16, at 11).

Moreover, Plaintiff contends that the impossibility defense “at most only excuses

performance of a contract,” and that any benefit previously conferred by either “is still subject

to restitution.” (Doc. 16, at 12). This contention is consistent with the fact that courts in this

Circuit have recognized an impossibility defense “at most only excuses performance of a

contract,” and does not permit either party to retain benefits conferred upon it by the other

party. Camden, 2024 WL 760232, at *3; ); see Lichtenfels v. Bridgeview Coal Co., 531 A.2d 22, 26

(Pa. Super. Ct. 1987) (“a party whose duty of performance is discharged due to

impracticability ‘is entitled to restitution for any benefit that he has conferred on the other

party by way of part performance or reliance’”); see also Ninivaggi v. Univ. of Delaware, 555 F.

Supp. 3d 44, 53 (D. Del. 2021) (finding that if students could prove their university promised

in-person classes, and that became impossible, “the students might be able to recover

restitution” if the school saved money as a result).

Plaintiff’s allegation that “[the University] saved significant sums of money” as a result

of the shift to online learning, is sufficient to satisfy Plaintiff’s burden as to his claim that the

University may be required to confer restitution upon Plaintiff at this early stage of the

litigation. (Doc. 1, ¶ 80); see Camden, 2024 WL 760232, at *3 (“Camden has alleged that

‘Bucknell saved significant sums of money’ by switching formats, which the Court must

accept as true on a motion to dismiss”); see also Faw, 2024 WL 3237601, at *7. Thus, the Court

finds that at the motion to dismiss stage, it is premature to address the University’s

impossibility defense, as questions of fact regarding whether Plaintiff is entitled to restitution

are to be addressed later in litigation. Accordingly, the Court finds that the University’s

modification, waiver, ratification, and impossibility arguments are not apparently resolved on

the face of the complaint. The University’s motion to dismiss is therefore DENIED on these

bases. (Doc. 10).

4. Plaintiff’s “Entire Benefit”

Posing another alternative argument for dismissal, the University asserts that if the

Court determines an implied contract for an “on-campus experience” existed based on the

allegations in the Complaint, such experience was covered by fees paid by Plaintiff, not

tuition, and therefore recovery must be limited accordingly. (Doc. 13, at 25). The University

argues that its Course Catalog “makes clear that the Mandatory Fees are intended to

compensate [the University] for providing the 'on campus experience' while tuition is entirely

tied to coursework and academic credits.” (Doc. 13, at 25). According to the University, the

Complaint concedes that Plaintiff paid the fee to benefit from on-campus services. (Doc. 13,

at 26). Further, the University argues that Plaintiff fails to allege that “tuition includes

anything other than the coursework and academic credits that [he] unquestionably received.”

(Doc. 13, at 26). Thus, the University avers, “the Tuition Claims and Mandatory Fee Claims

are separate and distinct.” (Doc. 13, at 27).

Plaintiff refutes the University’s characterization of his allegations, noting that he

alleges that he, and other members of his proposed class, “paid their tuition in the Spring 2020

semester to enjoy everything [the University] offered them, including on-campus resources,

campus community, and in-person education throughout the entire Spring 2020 semester.” (Doc.

1, ¶ 34; Doc. 16, at 26) (emphasis added). Plaintiff also points to his allegation that in

exchange for his tuition, he expected to have “in-person interaction with faculty.” (Doc. 1, ¶

29; Doc. 16, at 26). Overall, Plaintiff maintains that “[d]espite paying tuition and fees to cover

both their on-campus education and access to campus services and facilities, [the University]

prevented Plaintiff and others from obtaining the full value of these benefits by closing its

campus and unilaterally moving all courses online mid-way through the spring 2020

semester.” (Doc. 16, at 26-27).

Courts have found that at the motion to dismiss stage, it is sufficient for a plaintiff to

allege that he or she paid both tuition and fees in exchange for an on-campus experience and

education. See Faw, 2024 WL 3237601, at *5 (“The Court agrees that Plaintiff has adequately

alleged payment of ‘tuition in the Spring 2020 semester to enjoy everything Villanova offered

[her], including on-campus resources, campus community, and in-person education for the

entire Spring 2020 term’”); see also Camden, 2024 WL 760232, at *4 (“While claims to tuition

and other fees may be distinct, Camden's Complaint is sufficient to state a claim for breach of

contract as to both”). Here, Plaintiff’s allegation that he paid tuition to “enjoy everything [the

University] offered [him], including on-campus resources, campus community, and in-person

education throughout the entire Spring 2020 semester,” is sufficient to meet this burden. (Doc.

1, ¶ 34). The University’s motion to dismiss is therefore DENIED on this basis. (Doc. 10).

Plaintiff has sufficiently stated a claim for breach of an implied contract against the University.

B. UNJUST ENRICHMENT CLAIM

The parties also dispute whether Plaintiff has sufficiently alleged that the University

was unjustly enriched by retaining Plaintiff’s tuition and fee payments following the campus

shutdown due to the Covid-19 pandemic. The University argues that because it never

promised Plaintiff a fully “on-campus experience,” it would not be “inequitable” for the

school to retain his tuition and fee payments, as it continued to provide a benefit in the form

of online courses for academic credit, in exchange for tuition payments. (Doc. 13, at 17-18).

Plaintiff argues that because his courses “lacked the in-person feature and cost [the University]

less to provide than the promised education,” the University’s retention of the money he paid

is unjust. (Doc. 16, at 16).

Under Pennsylvania law, to assert a claim for unjust enrichment a plaintiff must allege:

“(1) the plaintiff conferred a benefit on the defendant; (2) the defendant appreciated that

benefit; and (3) the defendant retained the benefit under circumstances where it would be

inequitable to do so without payment of value.” Hickey, 81 F.4th at 316 (citing WFIC, LLC v.

LaBarre, 148 A.3d 812, 819 (Pa. Super. Ct. 2016)); see also Faw, 2024 WL 3237601, at *6. A

plaintiff may recover for unjust enrichment “by contractual remedy in cases where there is

found to be, in fact, no contract, but where circumstances are such that justice warrants a

recovery as though there had been a promise.” Figueroa v. Point Park Univ., 553 F.Supp.3d

259, 275 (W.D. Pa. 2021). While Pennsylvania law prohibits unjust enrichment claims when

the parties’ relationship is governed by an express or implied contract, “the Federal Rules of

Civil Procedure permit such claims to be pleaded in the alternative where [] the existence or

applicability of a contract is in dispute.” Hickey 81 F.4th at 315–16 (citing Fed. R. Civ. P.

8(d)(3)) (“A party may state as many separate claims or defenses as it has, regardless of

consistency”). Here, Plaintiff asserts his unjust enrichment claim in the alternative to his

breach of implied contract claim. (Doc. 1, ¶¶ 74-84). Further, the parties do not dispute that

Plaintiff has sufficiently pled elements one and two of his unjust enrichment claim. The parties

disagree just about whether Plaintiff has sufficiently pled element three of his claim, that the

University received a benefit that it would be inequitable for it to retain in full. (Doc. 13 at 17-

18; Doc. 16, at 15-16). For the following reasons, the Court finds Plaintiff has sufficiently pled

a claim for unjust enrichment.

Plaintiff alleges that “as a result of closing campus and moving classes online, Scranton

saved significant sums of money.” (Doc. 1, ¶¶ 80-81). Other courts have held that this

allegation is sufficient for an unjust enrichment claim to survive a motion to dismiss. See

Hickey, 81 F.4th at 316 (holding that the plaintiffs adequately stated an unjust enrichment

claim when “[t]he Students allege[d] that the Universities retained considerable cost savings—

at Students' expense—by transitioning to remote learning”); see also Faw, 2024 WL 3237601,

at *8 (“This Court must apply the Third Circuit's holding in Hickey, which applies squarely to

the facts alleged here: specifically, that a plaintiff may plausibly allege an unjust enrichment

claim by pleading that a university inequitably retained tuition and fee payments despite

having transitioned to remote learning during the COVID-19 pandemic”); see also Camden

2024 WL 760232, at *4 (“Just as in Hickey, Camden has adequately alleged that Bucknell

‘retained considerable cost savings—at [Bucknell] Students’ expense—by transitioning to

remote learning’”). While the parties dispute whether the University profited from the

transition to online learning, that is a factual question that cannot yet be resolved. See Hickey,

81 F.4th at 316 (“we will not resolve that factual question at the motion-to-dismiss stage”).

Accordingly, the Court will DENY the University’s Motion to Dismiss as to Plaintiff’s unjust

enrichment claim.

IV. CONCLUSION

For the foregoing reasons, the University’s Motion to Dismiss is DENIED. (Doc. 10).

An appropriate order follows.

Dated: August 19, 2024 s/ Karoline Mehalchick

KAROLINE MEHALCHICK

United States District Judge