Present: Carrico, C.J., Compton, Stephenson, Lacy, Keenan,
and Koontz, JJ., and Whiting, Senior Justice
JEFFREY C. TUOMALA, ET AL.
v. Record No. 952286 OPINION BY JUSTICE BARBARA MILANO KEENAN
November 1, 1996
REGENT UNIVERSITY
FROM THE CIRCUIT COURT OF THE CITY OF VIRGINIA BEACH
Edward W. Hanson, Jr., Judge
The primary issue in this appeal is whether an employer's
refusal to renew an employment contract under its original terms
constituted a breach of contract.
Three professors at Regent University (Regent), Jeffrey C.
Tuomala, Elaine Shouse Waller, and Clifford W. Kelly
(collectively, the professors), filed declaratory judgment suits
seeking a determination of rights under their faculty contracts.
The professors alleged that their contracts entitled them to
permanent tenured employment at Regent and requested the trial
court to declare that (1) they were entitled to a renewal of the
exact terms of their three-year continuing contracts, and (2)
they could not be dismissed from their positions as tenured
professors at Regent unless they were in breach of their
contracts, or unless the schools in which they taught were
discontinued. The professors also alleged under an estoppel
theory that they were entitled to annual renewal of their
contracts because they had reasonably relied to their detriment
on tenure policy statements made by Regent's agents.
The suits were consolidated and the trial court heard
evidence in a seven-day bench trial. The evidence showed that
each of the three professors had signed a faculty contract for
the 1993-94 academic year (faculty contracts). These contracts
were signed by the president, the provost, and the dean of the
respective school in which each professor taught.
The provisions in dispute relate to the interpretation of
the contract phrase, "three-year continuing contract." These
provisions are set forth below.
The contracts each stated:
This three-year continuing contract is subject to the
policies and procedures governing such contracts as set
forth in the [f]aculty [h]andbook effective August
1992.
The preface to the faculty handbook stated:
The [f]aculty [h]andbook contains the major policies
and procedures that govern the academic affairs and
some of the administrative affairs of the university.
Our policies are under continuous review and subject to
change without notice.
Other handbook provisions stated:
Tenure -- Continuing Contract
Annual Entitlement. A person who has received an
appointment under a continuing contract is annually
entitled to a new contract unless he is found by the
university to have breached his contract or unless the
school or academic program in which he is employed has
been discontinued.
* * *
Annual Review
Annually, a faculty member is offered a new contract
consistent with the above policies and procedures. It
supersedes the previous contract which may have a
remaining term of one or, in some cases, two years.
The second year, and in some cases the third year, of
both the provisional and continuing contract are, by
design, never expected to be binding on the parties
except under the conditions, as follows: one or both
parties choose not to offer or to accept a new
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employment contract. The second year, and in some
cases the third year, therefore, are designed to insure
that the employee is employed for one, or in some
cases, two or more years so that he can find other work
without economic hardship. 1
Regent adopted a new policy in the 1994-95 academic year,
under which it offered each of the professors a new contract.
The contracts did not include the term, "three-year continuing
contract," but instead provided a "tenured faculty appointment"
for one year, subject to "tenure review" during the following
academic year. The professors did not sign the new contracts
based on their belief that the new "tenure" policy significantly
reduced or eliminated their contractual rights as set forth in
the faculty handbook.
The professors introduced evidence showing that in 1989,
during the process of securing full accreditation for the Regent
Law School, Herbert W. Titus, then the Dean of the Law School,
received a letter from the American Bar Association (ABA) site
team questioning whether Regent provided tenured contracts to its
faculty. Robert G. Slosser, who was then Regent's president,
submitted a response attempting to clarify Regent's policy. As
part of the response, Slosser explained paragraph 6 of the
faculty handbook by noting that this paragraph
was not written in derogation of the guaranteed annual
three-year contract, as the explicit proviso to that
section clearly states. In other words, this provision
1
This section of the handbook was referred to throughout
litigation as "paragraph 6."
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does not allow the University to substitute a decision
not to offer a new employment contract inconsistent
with its annual obligation to offer such contract to
any faculty whose appointment is on a three-year
continuing contract.
The professors also presented evidence that during ABA
hearings, Titus stated that a "tenured" professor was entitled
annually to receive a new three-year contract unless he was found
to be in breach of the contract, or the program in which he
taught was discontinued. In addition, in a 1990 response to an
ABA site team report, Titus referred to Slosser's letter as the
"authoritative interpretation and written commitment regarding
the University's tenure system."
M.G. Robertson, Regent's chancellor, testified that Regent's
Board of Directors always had been opposed to the concept of
permanent tenured employment. He stated that the Board was
unaware of the Slosser letter until late 1993, and that had he
and the Board known of the representations made to the ABA, they
"would have shut the law school down."
Robertson also confirmed the policy stated in the faculty
handbook that the entire power to set university policy is vested
in the Board. Robertson stated that the president's function is
to carry out the Board's broad policy directives within the
policy guidelines, and that Regent's presidents are not permitted
to take any unauthorized action.
A former Regent president, David J. Gyertson, testified that
Regent's administration had opposed the concept of permanent
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tenured employment since the university was founded. Gyertson
stated that the continuing contract was structured to provide
financial security to a faculty member, in the event that Regent
terminated the contract during its three-year duration. Adelia
Robertson, a Board member since Regent's founding, testified that
the continuing contract was not a guarantee of permanent
employment, and that Regent had never had a "tenure" system.
Gyertson also testified that Regent's president did not have
the authority to change the university's "foundational" policies,
especially those related to the Board's role in setting the terms
and conditions of employment contracts. Gyertson stated that his
job as president was to apply the policies of the Board, and that
if adjustments were necessary, he was "under mandate to bring
those changes to the [B]oard."
Professor Kelly stated that he was not aware of the Slosser
letter before the litigation began. Although Professor Tuomala
stated that he had read the Slosser letter, he also testified
that he began teaching at Regent about two years before the
letter was written. The record is silent regarding Professor
Waller's knowledge of the letter.
Professor Kelly stated that he could not remember whether,
during his initial employment interview, the Dean of the College
of Communications and the Arts had represented the university's
employment policy as "continuing" or "tenured." Professor
Tuomala did not recall the exact words used in his interview, but
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said that he came away with an understanding that Regent had
"some sort" of tenure. Finally, Professor Waller testified that
when she raised the issue with the Dean of the College of
Communication and the Arts, he stated that the continuing
contract was essentially a "tenure contract" and that she would
be "secure." The professors all left other employment positions
to work at Regent.
Relying in part on the testimony presented, the trial court
ruled that the contracts did not provide permanent tenured
employment, but merely afforded financial security to a professor
who might no longer be acceptable to the university, or who might
wish to terminate his employment with the university. The court
ruled that Regent was bound to honor the remaining two years of
the three-year faculty contracts, but that Regent was not under
any obligation to renew the contracts under identical terms.
Finally, the court ruled that the tenure policy statements made
to the ABA were at variance with Regent's policy, and that these
representations were made without knowledge or authorization by
the Board, which "makes the policy."
On appeal, the professors primarily argue that the trial
court disregarded the unambiguous language of the faculty
contracts which promised annual renewal, absent breach of
contract by the professors. The professors also advance an
alternative argument that, even if the contract language is
ambiguous, the trial court erred in admitting certain parol
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evidence. We disagree with both contentions.
We first address the issue whether the contract language is
ambiguous. The question whether a writing is ambiguous is one of
law, not of fact. Langman v. Alumni Ass'n of the Univ. of
Virginia, 247 Va. 491, 498, 442 S.E.2d 669, 674 (1994); Wilson v.
Holyfield, 227 Va. 184, 187, 313 S.E.2d 396, 398 (1984). Thus,
we are not bound by the trial court's conclusions on this issue,
and we are permitted the same opportunity as the trial court to
consider the contract provisions. Langman, 247 Va. at 498, 442
S.E.2d at 674; Wilson, 227 Va. at 187-88, 313 S.E.2d at 398.
We hold that the language of the faculty contracts is
ambiguous. "An ambiguity exists when language admits of being
understood in more than one way or refers to two or more things
at the same time." Amos v. Coffey, 228 Va. 88, 92, 320 S.E.2d
335, 337 (1984) (quoting Renner Plumbing v. Renner, 225 Va. 508,
515, 303 S.E.2d 894, 898 (1983)).
The faculty contracts specify that the professors were
entitled to a "three-year continuing contract," as explained in
the faculty handbook. However, the handbook states only that a
professor receiving an appointment under a continuing contract is
entitled annually to a "new contract," rather than renewal of the
professor's existing contract. From our reading of these
provisions, it is unclear whether the faculty contracts entitle
the professors to renewal of identical three-year continuing
contracts, or whether the contracts annually entitle them to new,
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but potentially different, contracts.
Having found that the contract language is ambiguous, we
next consider the trial court's admission of certain parol
evidence, as well as its factual findings. When the language of
a contract is ambiguous, parol evidence is admissible, not to
contradict or vary contract terms, but to establish the real
contract between the parties. Reed v. Dent, 194 Va. 156, 163, 72
S.E.2d 255, 259 (1952). The construction of an ambiguous
contract is a matter submitted to the trier of fact, who must
examine the extrinsic evidence to determine the intention of the
parties. Cascades North Venture Ltd. Partnership v. PRC Inc.,
249 Va. 574, 579, 457 S.E.2d 370, 373 (1995); see Greater
Richmond Civic Recreation, Inc. v. A. H. Ewing's Sons, Inc., 200
Va. 593, 596, 106 S.E.2d 595, 597 (1959).
We hold that the trial court did not err in considering
evidence from present and former Regent Board members regarding
the Board's intent as expressed in the faculty contracts. The
Board is Regent's policy making body and was a party to the
contracts. Thus, the trial court was entitled to give the Board
members' testimony great weight in determining the Board's
intention. See Am. Realty Trust v. Chase Manhattan Bank, 222 Va.
392, 403, 281 S.E.2d 825, 831 (1981).
We review the evidence in the light most favorable to
Regent, the prevailing party at trial. RF&P Corp. v. Little, 247
Va. 309, 319, 440 S.E.2d 908, 915 (1994); Ravenwood Towers, Inc.
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v. Woodyard, 244 Va. 51, 57, 419 S.E.2d 627, 630 (1992). Since
the trial court heard the evidence ore tenus, its findings based
on an evaluation of the testimony are entitled to the same weight
as a jury's verdict. RF&P Corp., 247 Va. at 319, 440 S.E.2d at
915. Thus, the trial court's decision will be upheld unless it
appears from the evidence that the judgment is plainly wrong or
unsupported by the evidence. Code § 8.01-680; Langman, 247 Va.
at 498, 442 S.E.2d at 674.
The evidence showed that only the Board has the authority to
set Regent's policy. M.G. Robertson, Adelia Robertson, and
Gyertson all testified that the Board had opposed the concept of
permanent tenured employment throughout Regent's history and had
been unaware until late 1993 that any Regent employee had made
contrary representations concerning Regent's policy. In
addition, the professors themselves did not state that they were
told that the faculty contracts offered permanent tenured
positions. Thus, the trial court's ruling that the faculty
contracts did not provide permanent tenured employment is
2
supported by the evidence.
Next, we find no merit in the professors' argument that
2
Since the trial court's ruling is supported by the evidence
without resort to the language of the handbook preface, we need
not consider the court's preliminary ruling that the contracts
incorporated this language.
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Regent was bound, under agency principles, by the tenure policy
representations made by Regent administrators. As stated above,
the record does not show that the professors were offered
permanent tenured positions when they negotiated their faculty
contracts. Further, since the professors did not testify that
they relied on Slosser's or Titus's statements in entering into
their faculty contracts, those statements did not bind Regent
with respect to the professors' claims.
We also find no merit in the professors' other claims, which
are based on theories of equitable and promissory estoppel. To
establish a claim of equitable estoppel, without proving fraud,
the complainant must show that he reasonably relied on the
representations and conduct of the defendant, such that he
changed his position to his detriment. Stewart v. Lady, 251 Va.
106, 113, 465 S.E.2d 782, 785 (1996); T . . . v. T . . ., 216 Va.
867, 872-73, 224 S.E.2d 148, 152 (1976).
The doctrine of equitable estoppel is not available unless
the party advancing the claim can show that he has acted in
reliance upon an action or statement of the party he seeks to
bind. Khoury v. Community Memorial Hosp., Inc., 203 Va. 236,
243, 123 S.E.2d 533, 538 (1962). As stated above, the
professors' own testimony showed that they were not promised
permanent tenured employment by Regent administrators, and that
they did not act in reliance on Slosser's or Titus's
representations.
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Turning to the claim of promissory estoppel, we first note
that we have not applied the doctrine in this Commonwealth.
Stone Printing and Mfg. Co. v. Dogan, 234 Va. 163, 165, 360
S.E.2d 210, 211 (1987). Moreover, promissory estoppel is an
equitable doctrine which generally is used to imply a contract
where none exists. Dickens v. Quincy College Corp., 615 N.E.2d
381, 386 (Ill. App. Ct. 1993). Thus, the doctrine would not
apply here because the parties made an enforceable contract.
For these reasons, we will affirm the trial court's
judgment.
Affirmed.
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