Brumley v. Commonwealth Business ColLege Education Corp.

945 N.E.2d 770, 2011 Ind. App. LEXIS 551, 2011 WL 1136120
CourtIndiana Court of Appeals
DecidedMarch 29, 2011
Docket45A04-1002-CT-66
StatusPublished
Cited by26 cases

This text of 945 N.E.2d 770 (Brumley v. Commonwealth Business ColLege Education Corp.) is published on Counsel Stack Legal Research, covering Indiana Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Brumley v. Commonwealth Business ColLege Education Corp., 945 N.E.2d 770, 2011 Ind. App. LEXIS 551, 2011 WL 1136120 (Ind. Ct. App. 2011).

Opinions

OPINION

VAIDIK, Judge.

Case Summary

This is an interlocutory appeal from an order compelling arbitration. Plaintiff students Connie Brumley, Ronisha Smith, and Stephanie Anderson brought suit against defendant Brown Mackie College. The plaintiffs allege that they were fraudulently induced to enroll at Brown Mackie due to misrepresentations of accreditation. Brown Mackie moved to compel arbitration based on arbitration clauses in the plaintiffs’ student enrollment agreements. The trial court sustained Brown Mackie’s [773]*773motion, and the plaintiffs now appeal. We conclude that, because the plaintiffs’ action challenges the enrollment agreements in their entirety rather than the arbitration clauses in particular, the plaintiffs’ claims remain subject to arbitration. We affirm.

Facts and Procedural History1

Brown Mackie College offers a postsec-ondary degree program in surgical technology at its Merrillville location. According to the plaintiffs, Brown Mackie advertised that its program was accredited and that graduates were eligible to sit for a certifying exam administered by the National Board of Surgical Technology and Surgical Assisting. The plaintiffs enrolled in Brown Maekie’s surgical technology program relying on the school’s representations that it was accredited.

Each of the plaintiffs signed a Brown Mackie “ENROLLMENT AGREEMENT” as well as a supplemental form titled “ARBITRATION.” The header of the enrollment agreement read, “Accredited member, Accrediting Council for Independent Colleges and Schools (ACICS).” See, e.g., Appellee’s App. p. 57. The agreement specified tuition and fees, stated the school’s refund policy, and outlined the student complaint process.

Both the enrollment agreements and arbitration forms contained substantially similar arbitration clauses. Those clauses provided:

You and Brown Mackie College-MV agree that any dispute or claim between you and BMC (or any company affiliated with BMC, or any of its officers, directors, trustees, employees or agents) arising out of or relating to this enrollment agreement or, absent such agreement, your enrollment or attendance at BMC, whether such dispute arises before, during, or after your attendance and whether the dispute is based on contract, tort, statute, or otherwise, shall be, at your or BMC[’s] election, submitted to and resolved by individual binding arbitration pursuant to the terms described herein.
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IF EITHER YOU OR CBC CHOOSES ARBITRATION, NEITHER PARTY WILL HAVE THE RIGHT TO A JURY TRIAL, TO ENGAGE IN DISCOVERY, EXCEPT AS PROVIDED IN THE APPLICABLE ARBITRATION RULES, OR OTHERWISE LITIGATE THE DISPUTE OR CLAIM IN ANY COURT .... FURTHER, YOU WILL NOT HAVE THE RIGHT TO PARTICIPATE AS A REPRESENTATIVE OR MEMBER OF ANY CLASS OF CLAIMANTS PERTAINING TO ANY CLAIM SUBJECT TO ARBITRATION. THE ARBITRATOR’S DECISION WILL BE FINAL AND BINDING. OTHER RIGHTS THAT YOU OR AiP WOULD HAVE IN COURT ALSO MAY NOT BE AVAILABLE IN ARBITRATION.
The arbitrator shall have no authority to arbitrate claims on a class action basis, and claims brought by or against you may not be joined or consolidated with claims brought by or against any other person....
The Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1, et seq., shall govern this arbitration provision. This arbitration provision shall survive the termination of your relationship with BMC....

See, e.g., id. at 81, 58.

The plaintiffs paid tuition and attended their program courses, but at some point they learned that Brown Mackie lacked accreditation in surgical technology.

[774]*774The plaintiffs filed suit against Brown Mackie alleging breach of express and implied contract, intentional and negligent misrepresentation, and fraud. The plaintiffs claimed in relevant part that Brown Mackie’s representatives “knowingly made false statements to students about accreditation, externships and job placement after graduation, thereby inducing students to enroll in defendant’s Surgical Technology program.” Appellants’ App. p. 184. Without a degree from an accredited program, the plaintiffs alleged they were unable to secure the type of surgical jobs that they were being trained for.

Brown Mackie moved to compel arbitration based on the above-quoted arbitration provisions. In response, plaintiffs tendered affidavits stating, among other things, that they were “given no opportunity to read or study the enrollment form that BMC presented,” were “given no opportunity to have an attorney review the enrollment form,” “did not know and [were] not made aware that words on the back said students give away the right to conduct discovery,” “did not know what the term discovery meant,” “did not know, and [were] not made aware, that words on the back said students give away the right to combine their claims with each other against BMC in a class action,” and “did not know and [were] not made aware that words on the back said students were being asked to give away the right to have a jury hear a dispute with BMC.” Id. at 259, 265.

Original trial judge John R. Pera issued an order denying Brown Mackie’s motion to compel arbitration. Judge Pera found that the “Plaintiffs allege that the school is not accredited, whereas the Agreement explicitly states otherwise. Indeed, Plaintiffs’ claim addresses the actual contents of the document. Therefore, because grounds for the revocation of the Agreement — fraud and fraudulent inducement concerning misstatements of the content of the Agreement — exist, this Court cannot determine an existence of an enforceable agreement to arbitrate the dispute.” Id. at 345.

Soon, however, the plaintiffs’ cause was transferred to another court for consolidation with a similar pending action, and Brown Mackie’s motion to compel arbitration was readdressed by Judge Gerald N. Svetanoff.

Judge Svetanoff granted Brown Mack-ie’s motion to compel arbitration with respect to the plaintiffs. Judge Svetanoff agreed with Judge Pera’s reasoning vis-a-vis the enrollment agreements alone, but he did not think Judge Pera’s rationale extended to the separate arbitration forms. Judge Svetanoff concluded that “the alleged fraud, which may have affected the enforceability of the arbitration provisions contained in the Enrollment Agreement, does not affect the enforcement of the separate Arbitration Agreement that contained none of the representations alleged by the plaintiffs to have been false and fraudulent. Accordingly the separate Arbitration Agreements are enforceable as to all plaintiffs who executed them.... ” Id. at 18.

The plaintiffs sought leave to file this interlocutory appeal. The trial court granted certification, and we accepted jurisdiction.

Discussion and Decision

The plaintiffs claim that the trial court erred by granting Brown Mackie’s motion to compel arbitration. Brown Mackie purports to “cross-appeal,” attacking the rationale of the trial court’s order.

I. Standard of Review/Materials Reviewable on Appeal

This is an appeal from an order compelling arbitration, which we review de [775]*775novo. State ex rel. Carter v.

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Cite This Page — Counsel Stack

Bluebook (online)
945 N.E.2d 770, 2011 Ind. App. LEXIS 551, 2011 WL 1136120, Counsel Stack Legal Research, https://law.counselstack.com/opinion/brumley-v-commonwealth-business-college-education-corp-indctapp-2011.