Jennifer Kerr v. Vatterott Educational Centers, Inc.
2014 WL 4192731, 2014 Mo. App. LEXIS 940, 439 S.W.3d 802 (2014)
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Rule of Law:
Under the Missouri Merchandising Practices Act (MMPA), a seller's deceptive oral misrepresentations made in connection with a sale can form the basis of a valid claim, and this claim is not defeated by a written contract that contradicts those misrepresentations.
Facts:
- In 2009, Jennifer Kerr, a single mother, sought to enroll in a program at Vatterott College to eventually become a registered nurse.
- An admissions coordinator, Leah Lehman, told Kerr that Vatterott's 'condensed' Medical Assistant (MA) program credits would transfer to a nursing program, allowing her to 'get done faster.'
- Lehman represented that the program cost about $21,000 and that the Medical Office Assistant (MOA) program was 'one in the same' as the MA program.
- Based on these representations, Lehman filled out and had Kerr sign an enrollment contract for the MOA Program, not the MA program Kerr believed she was enrolling in.
- Kerr obtained federal loans and grants to finance her education based on the information provided by Vatterott's staff.
- Just before completing the 60-week MOA program, Vatterott informed Kerr she would need to take out an additional loan of over $10,000 to proceed to the clinical MA program.
- Kerr also learned from Vatterott's Program Director that none of her MOA credits would transfer to a nursing degree.
- Kerr declined to take out more loans and graduated with an MOA certificate, which she found was not useful for obtaining a job in the medical field or pursuing her nursing career.
Procedural Posture:
- Ms. Jennifer Kerr sued Vatterott Educational Centers, Inc. in a Missouri trial court, alleging violations of the Missouri Merchandising Practices Act (MMPA).
- At the jury trial, Vatterott moved for a directed verdict at the close of Ms. Kerr's case and again at the close of all evidence; the trial court denied both motions.
- The jury returned a verdict for Ms. Kerr, awarding her $27,676.96 in actual damages and $13,000,000 in punitive damages.
- Following post-trial motions, the trial court entered an amended judgment reducing the punitive damages to $2,078,679.80 due to a statutory cap and adding $388,059.00 in attorney fees.
- Vatterott (appellant) appealed the trial court's judgment to the Missouri Court of Appeals, Western District, with Ms. Kerr as the appellee.
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Issue:
Does a consumer have a valid claim for deception under the Missouri Merchandising Practices Act (MMPA) based on a seller's oral misrepresentations, even when the consumer signed written documents that disclosed the true terms of the sale?
Opinions:
Majority - Judge Thomas H. Newton
Yes. A consumer has a valid claim for deception under the MMPA based on oral misrepresentations, even if contradicted by written documents. The court reasoned that the common law merger rule, which holds that a final written contract supersedes all prior oral agreements, does not apply to MMPA claims. The purpose of the MMPA is to prohibit deception in connection with a sale, and this violation occurs when the misrepresentation is made, regardless of whether the final contract corrects it. The court distinguished this case from those where the contract itself was the sole source of the alleged unfair practice, finding here that Vatterott's liability stemmed from the oral misrepresentations made by its employee which induced Ms. Kerr to sign the contract.
Analysis:
This decision reinforces the strength of the Missouri Merchandising Practices Act as a consumer protection statute by explicitly rejecting the application of the common law merger doctrine to such claims. It clarifies that sellers cannot use a detailed written contract as a shield to escape liability for fraudulent oral statements made to induce a consumer into a transaction. The case solidifies the principle that the deceptive act itself is the violation, making the content of the final written agreement largely irrelevant to establishing liability for prior misrepresentations under the MMPA. This provides a powerful tool for plaintiffs who were misled by salespeople, even if they signed contracts they did not fully understand.
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