By Dr. Robert J. Romano, St. John’s University, Senior Writer
On July 26, 2021, the Mountain East Conference (MEC), an NCAA Division II Conference out of Bridgeport, West Virginia, filed a federal lawsuit in the U.S. District Court for the Northern District of West Virginia against two of its member institutions, Franklin University and Franklin University — Urbana, LLC, d/b/a Urbana University.[1] As per its complaint, MEC alleges that the two universities breached the terms of the Conference’s Constitution and Bylaws when Urbana University decided to ‘close its doors’ and cease being an intercollegiate institution and, because it had no teams or athletes to compete, withdrew from the MEC altogether. Urbana University argues, however, that because it was forced to close due to the Covid-19 pandemic, it is discharged from any and all contractual duties per the doctrine of impossibility.[2]
As MEC member institutions, both Franklin and Urbana University were subject to Article III, Section 8 of the MEC Constitution and the accompanying Bylaws which govern how a college or university can withdraw from the Conference, together with any monetary exposure that the institution would have for doing so. The MEC, believing the language of these governing documents were so clear and unambiguous that there could be no issue of material fact to dispute its claim, on September 12, 2022, moved the District Court for Summary Judgment as to its sole cause of action – breach of contract.
Per the Federal Rules of Civil Procedure, summary judgment is appropriate if “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”[3] However, the movant “bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits if any, which it believes demonstrate the absence of a genuine issue of material fact.”[4]
Federal courts, before ruling on a motion for summary judgment in matters involving a breach of contract claim, must first find that a valid and enforceable contract existed between the parties. Once a valid contract is found, a federal court can then turn its attention to determine whether a contracting party breached the contract’s terms and conditions and, as a result of such breach, that another contracting party was damaged.
The MEC claims that its Constitution and Bylaws are sufficient evidence that a contract existed between itself and both Franklin and Urbana University, that it performed any and all of its obligations per the terms of these contracts, that the universities breached such terms when they failed to pay the agreed upon and required exit fee, and that MEC was damaged in the amount equal to the exit fee, that being $150,000.00.
In defending against MEC’s summary judgment motion, the two schools claim that performance under the contract was impossible because Urbana dissolved itself as a university thus it was unable to perform any and all of its contractual duties. The doctrine of impossibility, now referred to as the rule of impracticability, states as follows:
Under the doctrine of impracticability, a party to a contract who claims that a supervening event has prevented, and thus excused, a promised performance must demonstrate each of the following: (1) the event made the performance impracticable; (2) the nonoccurrence of the event was a basic assumption on which the contract was made; (3) the impracticability resulted without the fault of the party seeking to be excused; and (4) the party has not agreed, either expressly or impliedly, to perform in spite of impracticability that would otherwise justify his nonperformance.[5]
The District Court found, however, that the universities’ impracticability defense failed for a variety of reasons. First, the court noted that Urbana University’s president testified during a deposition that the school could afford to pay the exit fee, but simply refuses.[6] In addition, the District Court was taken aback by the fact that the universities received approximately $4,000,000 in federal Covid-19 relief that were earmarked as monies to be used to reopen the Urbana campus, but that this relief money was never used for such purpose.[7]
Therefore, as a result of these findings, the District Court for the Northern District of West Virginia determined that all evidence involving this matter “points to summary judgment” and ordered the now defunct Urbana University to pay $150,000.00 in liquidated damages as a result of failing to “comply with the withdrawal stipulations set forth under Section 8.2 of the Conference’s Constitution.”[8]
[1] Civil Action No. 1:21-CV-104.
[2] 2023 U.S. Dist. LEXIS 39017 at p. 5.
[3] Federal Rules of Civil Procedure 56(a).
[4] Celotex Corp. v. Catrett, 477 U.S. 317, 323, (1986).
[5] Gaddy Eng’g Co. v. Bowles Rice McDavid Graff & Love, S.E.2d 568, 574 (W. Va. 2013).
[6] ECF No. 51-5, Decker Dep. 211:4-212:12.
[7] ECF No. 51-6, Washington Dep. 150:9-18.
[8] 2023 U.S. Dist. LEXIS 39017 at p. 19.
