Students attending Owens Community College’s nursing program in the fall of 2009 are entitled to a hearing to demonstrate they lost future earning potential when the nursing program lost its national accreditation, an Ohio appeals court ruled.

The Tenth District Court of Appeals recently reversed the Ohio Court of Claims, which ruled that 62 former Owens students failed to prove they suffered any actual damages when the school lost accreditation. The appeals court found each student is entitled to a case-by-case assessment by the Court of Claims as to whether the lost accreditation led to the graduates taking lower-paying jobs or not pursuing advanced nursing degrees.

Owens, with nursing school programs in Findlay and Toledo, was accredited by the National League for Nursing Accreditation Commission (NLNAC) for more than 30 years until July 2009. NLNAC visited the campus in 2006, and delivered a negative report, but granted Owens conditional accreditation until early 2009 to bring its programs back into compliance. The school failed to do so and was notified in July 2009 that it lost its accreditation. Owens didn’t notify nursing students until late September that the accreditation was lost, which was after the time when fall semester students could drop courses and receive tuition and fees refunds.

The students filed a lawsuit in the Court of Claims in November 2009, claiming breach of contract, fraud, and unjust enrichment by Owens. The Court of Claims ruled no one at Owens deliberately withheld the loss of accreditation from the students and dismissed the fraud claim. The trial court then granted summary judgment for Owens to dismiss the remaining claims by the students, who appealed to the Tenth District.

Writing for the appeals court, Judge Jennifer Brunner found the Court of Claims based its ruling on the fact that since the school was still accredited by the Ohio Board of Nursing and the students were able to take the state’s nursing license exam, the students didn’t suffer any actual economic damages from the loss of accreditation. Judge Brunner noted several students who received associate’s degrees from Owens didn’t pursue advanced nursing degrees at schools such as The Ohio State University because it would only accept graduates from NLNAC-accredited schools. Others reported not being interviewed for nursing positions at hospitals that required graduation from an NLNAC school. However, Elise Scanlon, an expert on accreditation issues, testifying on behalf of the students “could not pinpoint any actual concrete effect on employment from the withdrawal of the accreditation,” Judge Brunner noted.

Based on the Tenth District’s 1977 Behrend v. State decision, Judge Brunner found the students have the right to argue the school damaged them, not based on an actual loss of earning suffered so far, but lost earning capacity based on the decisions they made after receiving a nursing degree from a non-accredited program. She explained the calculation of lost earning capacity is similar to property damage. A person is entitled to compensation to repair damaged property even if the person never actually repairs the damaged property. The amount of damage is not measured by what it cost to repair it, but the difference in the market value of the property before and after it was damaged, she wrote.

Judge Brunner said the Court of Claims must give each student a chance for a hearing where the student must prove their earning capacity is impaired and that impairment is due to the loss of accreditation by Owens. In addition, the students will have to prove Owens breached the contract it had with the student with some evidence that the school promised the program would be nationally accredited while they attended.

Judge Brunner wrote the Court of Claims, not the appeals court, needs to determine if there was a breach, noting there is enough evidence to consider the claim.

“(Owens) president and provost acknowledged the importance of the accreditation in the wake of its removal after more than 30 years, stating that the loss was a very hard blow to the program and that the students had been let down,” she wrote.

Judge Timothy S. Horton concurred in the opinion.

In a dissenting opinion, Judge William A. Klatt wrote he would uphold the Court of Claims’ decision because the students did not present any evidence that they suffered any damages. He cited Scanlon’s testimony that she could not pinpoint any actual concrete effect of the accreditation loss to determine the trial court correctly concluded the students suffered, at the most, only nominal damages.

Baird v. Owens Community College, 2016-Ohio-537
http://www.supremecourt.ohio.gov/rod/docs/pdf/10/2016/2016-Ohio-537.pdf
Civil Appeal from: Ohio Court of Claims
Judgment Appealed From Is: Reversed
Date of Judgment Entry on Appeal: Feb. 16, 2016

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