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General Counsel’s Corner: Athletics Scholarships and Coaches’ Oral Promises [Higher-Ed/College Athletics Best Practices Alert (First Quarter 2015)]

Author: Michael L. Buckner, Esquire (Shareholder and President)

On January 12, 2015, a federal district court in Delaware issued a decision in a student-athlete’s lawsuit contending a university failed to honor her oral athletic scholarship agreement made by the then-head coach. In Eppley v. University of Delaware, No. C.A. No. 13-cv-99 (GMS) (D. Del. Jan. 12, 2015), the court applied the unique facts of college athletics to legal principles inherent in Title IX, negligent misrepresentation and fraudulent inducement claims, and dismissed the case on summary judgement.

Facts:

Jennifer Eppley and her father, Daryl Eppley, filed a lawsuit against the University of Delaware, the Board of Trustees of the University of Delaware, and head field hockey coach Rolf Van de Kerkhof (collectively the “University”) on January 17, 2013. The Eppleys alleged the University failed to honor an athletic scholarship agreement made by the then head field hockey coach, Carol Miller. Specifically, the record indicates:

In September 2009, during Ms. Eppley's "official visit" to the University, Ms. Eppley and her parents had a meeting with Ms. Miller. Ms. Eppley contended Ms. Miller orally offered Ms. Eppley "a scholarship which she said would be 35% in [Ms. Eppley's] first year, 75% in year two, and 75% or more in years three and four." The court noted “Mr. Eppley sent an email to Coach Miller on September 24, 2009 for clarification regarding Ms. Eppley's scholarship” and, in response, Ms. Miller “clarified that ‘Jenn will be guaranteed to receive the same or greater (not less than) percentage of scholarship for years 3 and 4 that she is receiving for year 2.’”

On January 21, 2010, Ms. Eppley received a letter from Ms. Miller informing her that she had been selected to receive an athletic scholarship to the University. The amount, duration, conditions and terms of the award offered to Ms. Eppley were set forth in a written Athletic Grant-In-Aid agreement. The agreement offered Ms. Eppley an amount of $11,512.90 (equal to 35% of the tuition and fees that would have been owed that year by an out-of-state student) for the period beginning August 31, 2010, and ending May 28, 2011. The agreement was signed and dated by the Eppleys on February 3, 2010. Further, the Eppleys signed a National Letter of Intent, which included the following language: "My signature on this NLI nullifies any agreements, oral or otherwise, which would release me from the conditions stated within this NLI."

During Ms. Eppley's first semester, Ms. Miller announced her retirement and left the University’s field hockey program. Mr. Kerkhof was hired as the new head field hockey coach. On March 21, 2011, Mr. Kerkhof “informed Ms. Eppley that based on her performance, her scholarship was going to be reduced to 20% during her second year on the team”. Ms. Eppley subsequently was provided written notice of her reduction in athletically-related aid. Ms. Eppley filed an appeal and attended an administrative hearing in an attempt to have her scholarship amount increased. The appellate hearing panel upheld the scholarship reduction. Ms. Eppley resigned from the field hockey team prior to receiving the hearing panel's written decision.

Court’s Legal Analysis:

The Eppleys' Title IX claim was premised on the allegations that Ms. Eppley's scholarship was reduced while some male students' scholarships allegedly were not. The University contended “Ms. Eppley's claim, even if true, hardly reflects the type of University-wide, gender-based disparate treatment required to prove a Title IX violation” and the University “provided evidence showing that male students were, in fact, also provided lesser scholarships”. The district court concluded “summary judgment is appropriate as to the Eppleys' Title IX claim because there is no evidence in the record beyond Ms. Eppley's bare assertions and conclusory allegations to support their assertions of disproportional treatment”.

The Eppleys also asserted a negligent misrepresentation claim, which “requires (1) a pecuniary duty to provide accurate information, (2) the supplying of false information, (3) failure to exercise reasonable care in obtaining or communicating information; and (4) a pecuniary loss caused by justifiable reliance upon the false information”. Further, a negligent misrepresentation claim is viable “when there is a fiduciary relationship between the parties”. The district court ruled the “Eppleys made no attempt to satisfy the elements of this claim”, but relied “entirely on allegations that Coach Miller promised Ms. Eppley a multi-year scholarship, that Ms. Eppley ignored other opportunities, and that Coach Miller made the promise to induce Ms. Eppley to attend the University”. Further, the court noted a fiduciary relationship did not exist between the Eppleys and Ms. Miller during the recruiting process. Further, the court opined “even if Coach Miller had promised Ms. Eppley that she would receive a 75% scholarship her second year, any reliance on Coach Miller's alleged statements was not justifiable in the face of the GIA Contract and the NLI”.

Finally, the Eppleys alleged fraudulent inducement, which requires the establishment of the elements of common law fraud: (1) a false representation of material fact; (2) the defendant's knowledge or belief that the representation was false, or was made with reckless indifference to the truth; (3) the defendant's intent to induce the plaintiff to act or to refrain from acting; (4) the plaintiffs action or inaction taken in justifiable reliance upon the representation; and (5) damage to the plaintiff as a result of such reliance. The district court determined “no evidence was submitted to establish each of the elements of fraudulent inducement” (namely, although “the Eppleys argue that acceptance of the UD scholarship was the result of Miller's statement”, the plaintiffs “subsequently disclaimed all previous agreements and any reliance on Miller's statement was, therefore, unreasonable”).

Contact Michael L. Buckner (954-941-1844; mbuckner@bucknersportslaw.com) for additional information on recent judicial decisions involving higher-education institutions.