Verni v. Cleveland Chiropractic College
212 S.W.3d 150 (2007)
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Rule of Law:
To have standing to sue for breach of contract as a third-party beneficiary, the contract's terms must clearly and directly express the intent to benefit that party or an identifiable class to which the party belongs; a mere incidental benefit is insufficient.
Facts:
- Leonard Verni was a student at Cleveland Chiropractic College.
- Dr. Aleksandr Makarov was a professor at the college who taught Verni's dermatology class.
- An anonymous student alleged that Verni was selling copies of a forthcoming examination for Dr. Makarov's class.
- Following an investigation, Cleveland Chiropractic College concluded that Verni had committed academic misconduct as defined in the student handbook.
- Cleveland Chiropractic College dismissed Verni from the school.
- The employment contract between Dr. Makarov and the college required him to comply with the faculty handbook.
- The faculty handbook stated that students were entitled to be treated with courtesy, respect, fairness, and professionalism by faculty.
Procedural Posture:
- Leonard Verni filed suit against Cleveland Chiropractic College and Dr. Aleksandr Makarov in the circuit court (trial court).
- A jury returned a verdict against Dr. Makarov for breach of contract, awarding Verni $10,000 in damages.
- The jury also returned a verdict against Cleveland for fraudulent misrepresentation, awarding Verni $20,000 in damages.
- Cleveland filed a motion for judgment notwithstanding the verdict (JNOV), which the circuit court granted, setting aside the verdict against the college.
- The circuit court denied Verni's motion for a new trial on the issue of damages.
- Verni (appellant) appealed the circuit court's JNOV and its ruling on damages.
- Dr. Makarov (cross-appellant) appealed the jury's verdict against him on the breach of contract claim.
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Issue:
Does a student have standing as a third-party beneficiary to sue a professor for breach of the professor's employment contract with a college when the contract does not expressly state an intent to benefit students?
Opinions:
Majority - Chief Justice Michael A. Wolff
No. A student does not have standing as a third-party beneficiary to sue a professor for breach of the professor's employment contract with a college unless the contract's terms clearly and directly express an intent to benefit the student. The court reasoned that there is a strong presumption that parties to a contract intend to benefit only themselves. For a third party to enforce a contract, the contract must explicitly state an intent to benefit them or an identifiable class they belong to. Here, the one-page employment contract between Dr. Makarov and Cleveland detailed his duties, salary, and benefits, showing it was for the parties' mutual benefit. Although the contract incorporated a faculty handbook requiring fair treatment of students, this language does not overcome the strong presumption against third-party beneficiary status. Any benefit to students like Verni from the employment contract is merely incidental and does not grant them standing to sue for its breach.
Analysis:
This decision reinforces the high threshold for establishing third-party beneficiary status in contract law, particularly in the educational context. It clarifies that the general benefits students receive from faculty employment contracts are considered incidental, not direct, thus precluding them from suing professors for breach of those contracts. This holding limits a potential avenue for student litigation against faculty and directs such grievances toward institutional appeal processes or tort claims. The ruling solidifies the principle that to confer rights on a third party, a contract must demonstrate clear, express intent, thereby protecting contracting parties from unforeseen liability to an indefinite class of incidental beneficiaries.
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