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Armstrong v. Clarkson College

Supreme Court of Nebraska

September 1, 2017

Kelly Armstrong, appellee,
v.
Clarkson College, appellant.

         1. Directed Verdict: Appeal and Error. In reviewing a trial court's ruling on a motion for directed verdict, an appellate court must treat the motion as an admission of the truth of all competent evidence submitted on behalf of the party against whom the motion is directed; such being the case, the party against whom the motion is directed is entitled to have every controverted fact resolved in its favor and to have the benefit of every inference which can reasonably be deduced from the evidence.

         2. Directed Verdict: Evidence. A directed verdict is proper at the close of all the evidence only when reasonable minds cannot differ and can draw but one conclusion from the evidence, that is, when an issue should be decided as a matter of law.

         3. Judgments: Appeal and Error. An appellate court independently reviews questions of law decided by a lower court.

         4. Contracts: Appeal and Error. The formation and terms of an implied contract are questions of fact, which an appellate court reviews for clear error.

         5. Rules of Evidence. In proceedings where the Nebraska Evidence Rules apply, the admissibility of evidence is controlled by such rules; judicial discretion is involved only when the rules make discretion a factor in determining admissibility.

         6. Rules of Evidence: Appeal and Error. When the Nebraska Evidence Rules commit the evidentiary question at issue to the discretion of the trial court, an appellate court reviews the admissibility of evidence for an abuse of discretion.

         7. Trial: Evidence: Appeal and Error. In a civil case, the admission or exclusion of evidence is not reversible error unless it unfairly prejudiced a substantial right of the complaining party.

         8. Jury Instructions: Pleadings: Evidence. A litigant is entitled to have the jury instructed upon only those theories of the case which [297 Neb. 596] are presented by the pleadings and which are supported by competent evidence.

         9. Jury Instructions: Proof: Appeal and Error. To establish reversible error from a court's failure to give a requested jury instruction, an appellant has the burden to show that (1) the tendered instruction is a correct statement of the law, (2) the tendered instruction was warranted by the evidence, and (3) the appellant was prejudiced by the court's failure to give the requested instruction.

         10. Jury Instructions. Whether the jury instructions given by a trial court are correct is a question of law.

         11. Judgments: Appeal and Error. When reviewing questions of law, an appellate court has an obligation to resolve the questions independently of the conclusion reached by the trial court.

         12. __: __. It is not error for a trial court to refuse a requested instruction if the substance of the proposed instruction is contained in those instructions actually given.

         13. __: __. If the instructions given, which are taken as a whole, correctly state the law, are not misleading, and adequately cover the issues submissible to a jury, there is no prejudicial error concerning the instructions and necessitating a reversal.

         14. Motions for New Trial: Appeal and Error. An appellate court reviews a denial of a motion for new trial or, in the alternative, to alter or amend the judgment, for an abuse of discretion.

         15. Judges: Words and Phrases. A judicial abuse of discretion exists when the reasons or rulings of a trial judge are clearly untenable, unfairly depriving a litigant of a substantial right and denying just results in matters submitted for disposition.

         16. Contracts: Parties: Intent. An implied in fact contract arises where the intention of the parties is not expressed in writing but where the circumstances are such as to show a mutual intent to contract.

         17. Contracts: Parties. The requisite mutuality for an enforceable contract is absent when one of the contracting parties is bound to perform, and the rights of the parties exist at the option of one only.

         18. Contracts: Intent. Where an implied in fact contract exists, its terms may be shown by the surrounding facts and circumstances giving rise to the contract, the conduct of the parties when performing under the contract, or a general reasonableness standard.

         19. __: __. As a general matter, the terms of an implied contract are a question of fact to be determined by the jury based on the evidence presented.

         20. Pleadings. An affirmative defense raises a new matter which, assuming the allegations in the petition to be true, constitutes a defense to the merits of a claim asserted in the petition.

         [297 Neb. 597] 21. Colleges and Universities: Breach of Contract. An argument that academic deference applies to a decision of a college or university is not an affirmative defense, but instead relates to the proper standard for reviewing a plaintiff's claim for breach of contract premised on an academic judgment.

         22. Colleges and Universities: Courts. Not every decision by an academic institution is subject to deference.

         23. Directed Verdict: Pleadings. If there are controverted facts to support recovery upon any theory of liability pled by the plaintiff, then a directed verdict is properly denied.

         24. Contracts. The doctrine of impossibility of performance, often now called impracticability of performance, excuses a promisor's failure to perform a duty under a contract where performance has been rendered severely impracticable or impossible by unforeseen circumstances.

         25. Contracts: Proof. There are three general requirements for the application of the doctrine of impracticability of performance: (1) the occurrence (or nonoccurrence) of the event causing the impracticability was unexpected; (2) performance of the duty by the promisor would be extremely difficult and burdensome, if not impossible; and (3) the promisor did not assume the risk of the event's occurrence (or nonoccurrence).

         26. Contracts. Performance of a contractual duty is not impracticable merely because it has become inconvenient or more expensive. Mere difficulty of performance is not enough.

         27. __. A promisor's duty to perform will be excused if it is the other party's conduct that makes performance impossible or impracticable.

         28. Contracts: Proof. The party invoking the impracticability defense must show that he or she used reasonable efforts to surmount the obstacles which prevented performance.

         29. Jury Instructions: Evidence. A tendered jury instruction is warranted by the evidence only if there is enough evidence on the issue to produce a genuine issue of material fact for the jury to decide.

         30. Damages. A party is required only to mitigate damages that might have been avoided by reasonable efforts.

         31. __. In reviewing the reasonableness of a party's actions to mitigate damages, an appellate court often considers three factors: (1) the cost or difficulty to the plaintiff of mitigation, (2) the plaintiff's financial ability to mitigate, and (3) the defendant's actions to inhibit the plaintiff from mitigating damages.

         32. Administrative Law: Appeal and Error. Under the doctrine of exhaustion of administrative remedies, one must generally exhaust any available administrative remedies before one can seek judicial review.

         [297 Neb. 598] 33. Administrative Law. The exhaustion of administrative remedies doctrine generally applies to governmental entities.

         34. Administrative Law: Appeal and Error. The exhaustion of remedies doctrine applies in many cases to private, nongovernmental entities that provide internal administrative review procedures.

         35. Colleges and Universities: Employment Contracts. Where an employer or university provides a mandatory grievance procedure in a contract, the enforceability of a party's rights under the contract is conditioned on the exercise of that grievance procedure.

         36. Contracts: Appeal and Error. Mandatory grievance procedures must be exhausted before seeking judicial review, because the grievance procedure is part of the contractual bargain and defines the rights themselves.

         37. Administrative Law: Contracts: Proof. The exhaustion of a mandatory grievance procedure in a contract is a condition precedent to enforcing the rights under that contract.

         Appeal from the District Court for Douglas County: Marlon A. Polk, Judge. Reversed and remanded for a new trial.

          Brien M. Welch and Kathryn J. Cheatle, of Cassem, Tierney. Adams, Gotch & Douglas, for appellant.

          Jason Mario Bruno and Robert S. Sherrets, of Sherrets, Bruno & Vogt, L.L.C., for appellee.

          Heavican, C.J., Wright, Miller-Lerman, Cassel, Stacy, Kelch, and Funke, JJ.

          WRIGHT, J.

         I. NATURE OF CASE

         A jury awarded Kelly Armstrong a $1 million verdict on her breach of contract claim against Clarkson College (Clarkson). Armstrong had been a student at Clarkson, but was placed on probation and then administratively withdrawn from the school by Clarkson. Clarkson appeals the district court's denial of its motion for a directed verdict, the denial of several requested jury instructions, the exclusion of evidence, and the denial of its motion for new trial. Because we conclude that the district court erred by refusing to give Clarkson's requested jury instruction on Armstrong's alleged failure to fulfill a condition [297 Neb. 599] precedent by not exhausting the college's grievance procedure, we reverse, and remand for a new trial.

         II. BACKGROUND

         1. Clarkson's CRNA Program

         Clarkson is a nonprofit health science college located in Omaha, Nebraska. In 2010, Clarkson established a program for a master of science in nursing with a specialization in nurse anesthesia (CRNA program). After a student graduates from the program, the student can take a national examination to become a certified registered nurse anesthetist (CRNA).

         The CRNA program, like other nurse anesthetist programs, has two components, didactic and clinical. Clarkson's program is "front-loaded, " with the completion of the didactic portion first, followed by the clinical portion. The didactic portion, consisting of coursework, lasts 12 months. The clinical portion is completed at various clinical sites and lasts 18 months. In the clinical stage of the CRNA program, the students work at a hospital under the supervision of the hospital's CRNA staff, gaining experience in nearly every type of case a CRNA would encounter in practice. Clarkson contracts with clinical sites to provide clinical education for its students. These contracts, known as clinical affiliation agreements, outline the obligations of both Clarkson and the clinical sites.

         When the events underlying this litigation occurred in 2013, Clarkson had five primary clinical sites. A primary clinical site is one where a student completes the vast majority of his or her clinical work. In 2013, Clarkson also had two rural specialty sites where a student in the CRNA program could gain experience in a rural hospital setting. These specialty sites are designed to supplement the student's clinical experience, but unlike the primary clinical sites, do not provide all of the types of experience a student needs to complete his or her clinical requirements.

         In the fall of 2011, Armstrong enrolled in the CRNA program. She completed the didactic portion, earning a 3.84 grade point average. Armstrong then began the clinical phase of [297 Neb. 600] the program and was assigned to the University of Nebraska Medical Center (UNMC) as her main clinical site. She then began doing a rotation at a specialty clinical site in Red Oak, Iowa.

         2. Program Handbooks and Manuals

         At trial, several of Clarkson's student handbooks and policy manuals were admitted into evidence, including: Clarkson's student handbook, the handbook for nurse anesthesia students, Clarkson's nurse anesthesia program policies and procedures manual, Clarkson's nurse anesthesia program clinical site manual, and Clarkson's grievance policy. Clarkson's Code of Conduct (Code of Conduct) is contained within its student handbook, which applies to all students, not just those in the CRNA program.

         Many of the Clarkson handbooks and policies contained disclaimers that they were not contractual in nature: the CRNA program handbook states, "The information in this syllabus is intended to be informational and not contractual in nature, " and the CRNA program policies and procedures manual states, "The statements contained herein are not to be regarded as an offer or contract." Clarkson's student handbook and its clinical site manual do not appear to contain contractual disclaimers. Most of the handbooks also contained clauses reserving Clarkson's right to change the policies at any time.

         Also admitted was the code of ethics for the CRNA, which is adopted and promulgated by the American Association of Nurse Anesthetists (AANA). Clarkson students in the CRNA program are required to follow this code of ethics (AANA Code of Ethics) under the CRNA program handbook.

         3. AANA Conference

         When Armstrong was approximately halfway done with the clinical portion of the CRNA program, she decided to attend a national AANA conference in Washington, D.C. Armstrong testified at trial that she and Kristal Hodges, who Armstrong described as her "best friend in the program at the time, " [297 Neb. 601] decided to go, because they thought the conference would be fun and would provide a break from the rigors of clinical work. The conference took place on April 14 to 17, 2013. Armstrong and Hodges were the only two students in the Clarkson CRNA program who attended this national conference.

         4. A ANA Political Action Committee Potomac Cruise Fundraiser

         The AANA conference was 4 days long, Sunday through Wednesday. The conference on Sunday featured discussions on the legislative and political issues facing the nurse anesthetist profession. Hodges arrived on Saturday, the day before the conference, while Armstrong arrived on Sunday afternoon. The two stayed in the same hotel room.

         On Sunday night, AANA's political action committee hosted a fundraiser event for the conference attendees. The fundraiser was a boat cruise on the Potomac River. The attendees were instructed to wear either professional attire or dress for the event's 1980's theme. Many members of the Nebraska Association of Nurse Anesthetists and Nebraska CRNA's were in attendance at the fundraiser.

         Conference attendees were provided bus transportation to the fundraiser boat ride. Alcohol was served at the fundraiser; the attendees were given two drink tickets, and glasses of champagne were offered to them as they arrived on the boat.

         Armstrong testified that she consumed only four alcoholic drinks on the cruise. She testified that she used her two drink tickets for two beers, but did not remember finishing her champagne. She said that Timothy Glidden, the chief CRNA at UNMC and Armstrong's clinical supervisor, bought her a beer as did another individual. Armstrong estimated that the fundraiser lasted about 4 hours.

         5. Bus Ride

         After the fundraiser ended, the attendees were transported by bus back to the hotel. The bus was filled with conference and fundraiser attendees, including many from Nebraska. Also [297 Neb. 602] on the bus was Nancy Gondringer, the federal political director and past president of the Nebraska Association of Nurse Anesthetists and a member of the "Small States Committee" of the AANA. Glidden was on the bus, as was another UNMC CRNA and also a Clarkson CRNA instructor. Dennis Bless, the then-incoming president of the AANA, was also on the bus. Other students in CRNA programs and CRNA's from Nebraska and other states rode on the bus as well.

         There was some conflict in the witnesses' testimony at trial about what happened on the bus ride. Armstrong testified that she got on the bus and took a seat near Bless. She said that she and Bless were joking about the 1980's costumes that some were wearing as part of the fundraiser's theme. Hodges was seated behind her. Armstrong said that she asked for the fake moustache that Bless had as part of his 1980's costume and then stood up and turned around to Hodges, placed the moustache on her stomach, just below her belly button, and made a joke about a term used to reference ungroomed pubic hair. Armstrong said that she had used the term in the past as a nickname for Hodges or to tease her and that it was an "inside joke" between the two about Hodges' being single, because "if you're going to go out and start dating, you better clean that up." Armstrong testified that she told Bless that ungroomed pubic hair could have been part of her 1980's-themed costume, after which she obtained his fake moustache to make her joke.

         Other witnesses, such as Hodges, Gondringer, and Glidden, gave a slightly different account. They testified that Armstrong held her pants down near her pubic symphysis, with the moustache just above her pants, walking up and down the aisle of the bus, saying things like, "Look at my [ungroomed pubic hair], " and "[t]his is how yours looks like" to Hodges. Hodges, Gondringer, and Glidden told Armstrong to stop several times, after which she eventually sat down. But Armstrong testified that the other witnesses' accounts of her behavior were "exaggerated quite a bit."

         [297 Neb. 603] 6. Probation

         (a) Return From Conference

         As Armstrong was en route home from the conference. Hodges called Armstrong because she was concerned that Armstrong had missed her flight because she did not wake up in time that morning. According to Hodges, when they spoke over the telephone, Armstrong told Hodges that Hodges did not know how to have fun and was "too uptight." They argued about what had happened at the conference. Hodges told Armstrong that Armstrong may be in some trouble with Clarkson, because "[t]here were so many people there" and "[s]omebody's going to say something."

         Dr. Mary Hoversten, the director of Clarkson's CRNA program, soon received word of the incident on the fundraiser bus ride. The day the conference ended, about 3 days after the incident, Hoversten received a telephone call from Hodges, informing her about the incident. Hodges was emotional on the call and told Hoversten that Armstrong's behavior was unprofessional and very embarrassing to her. The next morning, Hoversten informed her supervisor of the situation and they decided to meet with Armstrong when she returned. Hoversten spoke to Armstrong over the telephone and told her not to return to her specialty clinical site, but to return to Clarkson's campus for a meeting. According to Hoversten, Armstrong acknowledged during the call that her behavior was unprofessional and that she was sorry about it.

         Hoversten spoke with Glidden over the telephone. Glidden described what he had observed on the bus ride and that he thought Armstrong's behavior was unprofessional and inappropriate. He said that he was not sure whether Armstrong would be allowed back at UNMC, her main clinical site. Hoversten also called Gondringer about the incident on the bus ride.

         (b) April 23, 2013, Meeting

         On April 23, less than a week after the conference ended, Armstrong had a meeting at Clarkson. In attendance at the meeting were Armstrong; Hoversten; Dr. Tony Damewood, the [297 Neb. 604] vice president of operations for Clarkson; and the vice president of academic affairs. Armstrong brought an attorney to the April 23 meeting. According to Armstrong, her attorney was not allowed in the meeting by Damewood, who made him wait in the hallway.

         The decision was made to place Armstrong on probation for violating the AANA Code of Ethics and the CRNA program handbook. Armstrong was told at the meeting that she would not be able to return to her specialty clinical site due to the rule in the CRNA program handbook that students on clinical probation cannot work at specialty clinical sites. According to Hoversten's notes from the meeting, the possibility that her clinical site may not allow her to return due to the incident was discussed.

         Damewood, who was not a part of the CRNA program, was present at the April 23 meeting because of his role in Clarkson's student assistance program. Damewood told Armstrong at the meeting that she had violated the Clarkson Code of Conduct. The Code of Conduct is a part of the Clarkson student handbook, applicable to all Clarkson students, not just the students in the CRNA program. The Code of Conduct has different procedural requirements for student discipline than the procedures for placing a student on clinical probation under the CRNA program handbook. Damewood said at trial that, in retrospect, he did not believe that Armstrong violated the Code of Conduct. Damewood never told Armstrong that he was incorrect to state that her conduct violated the Code of Conduct. No charges were ever filed against Armstrong under the Code of Conduct.

         (c) April 24, 2013, Meeting

         The next day, April 24, the academic progression committee met to formally notify Armstrong that she was being placed on probation and discuss the probation terms. Present at the meeting were Armstrong, Hoversten, and Dr. Ann Glow, the assistant director of the CRNA program. The notes from the meeting state that another faculty member and two [297 Neb. 605] UNMC clinical coordinators were absent and would be briefed on the meeting.

         At the April 24 meeting, Armstrong was given a formal notice by Hoversten that she was being placed on probation. The general plan for probation was discussed. The tentative plan was for Armstrong to return to her primary clinical site. UNMC, pending the approval of Glidden. Armstrong was told of UNMC's right to terminate her clinical experience. The plan, if UNMC did not allow her to return, was that Clarkson would "make a reasonable attempt to place [Armstrong] in an alternative site. ... If this is unsuccessful, [Armstrong] will be given the option to withdraw from the program or be terminated. [Armstrong] is made aware of [Clarkson's] Student Grievance Policy . . . ."

         Hoversten told Armstrong that she was being placed on probation due to a violation of rule 3.4 of the AANA Code of Ethics, which states that "[t]he CRNA is responsible and accountable for his or her conduct in maintaining the dignity and integrity of the profession." Armstrong was given a copy of this portion of the AANA Code of Ethics.

         Also discussed at the meeting was the CRNA program handbook rule regarding practice and professional ethics. The rule regarding professionalism states that "[s]tudents shall conduct themselves in a professional and respectable manner during class time, clinical time and during professional meetings and seminars." The subpart of the professionalism rule related to practice and professional ethics incorporates the AANA Code of Ethics and makes it applicable to students in the Clarkson CRNA program:

The program expects students to adopt and observe the AANA Code of Ethics. Violations of this ethical conduct standard will be regarded as professional and academic misconduct and failure to meet clinical performance objectives, and be subject to review as such.
If a student is found to be noncompliant with this policy disciplinary actions will be taken, up to and/or including dismissal from the Program.

         [297 Neb. 606] Additionally, the CRNA program handbook's probation policy and dismissal procedure was discussed. That provision distinguishes between academic probation and clinical probation. A student must, at a minimum, be placed on clinical probation for certain reasons, including "[f]ailure to comply with the AANA ethical code of conduct." It also states that a student may be dismissed from the program for failing to comply with the AANA Code of Ethics. Armstrong was also given a copy of this portion of the CRNA program handbook.

         The program's withdrawal and grievance policies were also discussed with Armstrong. The grievance policy allows students to grieve a complaint that "a specific decision or action that affects the student's academic record or status has violated published policies and procedures, or has been applied to the grievant in a manner different from that used for other students." The policy details the procedure for filing a grievance, including that grievances must be filed no later than 7 days after the incident in question. Grievances are heard by a grievance committee, which is composed of five members: an academic council member, a faculty member from the faculty senate executive committee, a student representative, a director from student services, and the vice president of academic affairs (who votes only in case of a tie vote), each of which must be without conflicts of interest. The policy states that "[t]he Grievance Committee is the designated arbiter of disputes within the student community in cases, which do not ...


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