STATE OF MINNESOTA

IN COURT OF APPEALS

A04-2435

Richard Schackmann, Sandra Schackmann, parents and
natural guardians of Adam Schackmann,

and

Adam Schackmann,
Appellants,

vs.

The Cathedral High School,
St. Cloud, Minnesota,
Respondent.

Filed August 30, 2005

Affirmed

Minge, Judge

Stearns County District Court

File No. C2-03-1352

Gordon H. Hansmeier, Rajkowski Hansmeier Ltd., 11 Seventh Avenue North, P.O. Box 1433, St. Cloud, MN 56302 (for appellants)

Peter A. Donohue, Michael E. Novak, Donohue Novak at Law, 804 West St. Germain Street, P.O. Box 971, St. Cloud, MN 56302 (for respondent)

Considered and decided by Minge, Presiding Judge; Willis, Judge; and Stoneburner, Judge.

U N P U B L I S H E D O P I N I O N

MINGE, Judge

Appellants challenge the dismissal by summary judgment of their claims against respondent school for defamation, negligent infliction of emotional distress, due process, and breach of contract. Appellants also contend that the timing of the summary judgment motion violated the scheduling order. We conclude that it was not an abuse of discretion for the district court to consider the summary judgment motion. Further, because appellants were not compelled to self-publish statements made by the school, because negligent infliction of emotional distress requires a viable defamation claim, because the school is not a state actor for purposes of due-process rights, and because there is no evidence of recoverable damages to sustain recovery on the breach-of-contract claim, we affirm.

FACTS

Adam Schackmann was a senior at respondent Cathedral High School (school), and Richard and Sandra Schackmann are his parents. The school is incorporated as a private, not-for-profit educational corporation and is associated with the Roman Catholic Diocese of St. Cloud.

On Saturday, December 1, 2001, the school was burglarized and vandalized. Adam had basketball practice at the school early in the day. That evening, he and two of his classmates returned to the locked school. Adam represented that their reasons for returning were to retrieve items that he and one of his friends had left. Adam said he saw a police vehicle at the school as they arrived. Adam and his friends entered the school through a door that one of the friends had propped open earlier in the day. They brought a flashlight, walked through several areas of the school and were in the building for half an hour. Adam did not retrieve the items for which he had allegedly come. At one point, the three went to see what the police were investigating. They were arrested as they stepped out of an elevator. At the police station, the boys were interviewed, and according to one of the officers, their statements differed regarding when they saw the police and why they went to the school. Fingerprints, blood, and broken glass were found at the scene of the burglary; Adam and his friends consented to giving police fingerprint samples and turned over their shoes and sample clothing to be tested for physical evidence.

Police evaluation of the situation was mixed. On the night of the burglary, one unidentified officer informed a group of individuals, including the president of the school, that in that officer’s opinion, Adam and his friends were not involved in the burglary. This information was conveyed to the principal and the dean of students. However, the officer responsible for the investigation was suspicious of Adam and his friends because of inconsistencies in their statements. Although the boys’ prints and clothing did not match the evidence collected from the scene, the police continued to investigate them for a year. Ultimately, no charges were filed against them.

Approximately two days after the burglary, the school principal and the dean of students met with Adam and his parents, as well as the two other students. The principal and the dean of students found the students’ statements inconsistent and felt that Adam did not tell the whole truth. Adam and his parents left the meeting “feeling that [the principal] and [the dean of students] felt that our son had lied, and that he was involved in this incident at Cathedral with a fourth person.”

The principal and the dean of students determined that the three students had committed the following violations: entered the building without authorization, evaded the police, were not honest with the principal or the dean of students, and endangered their own safety. Although the principal and the dean of students are ultimately responsible for disciplining the students, they referred the matter to the Student Assistance Team (SAT) for review and possible sanctions. One of the members of SAT is a school counselor who is employed by the school district with public funds.

The SAT recommended that the three students be suspended from school for the remainder of the semester and from extracurricular activities for the remainder of the school year. The principal and the dean of students decided to follow that recommendation. The school then notified appellants that Adam had three choices: accept the suspension, appeal the decision, or withdraw from school. Adam chose to withdraw. Adam enrolled in St. Cloud Technical High School, a public school, where he played lacrosse and participated in the band. The other two students served their suspensions and remained at the school.

In March 2003, Adam and his parents filed a complaint against the school claiming negligent and intentional infliction of emotion distress, defamation, denial of due process, and breach of contract. On September 3, 2004, the school filed a motion for summary judgment, which the district court granted, dismissing the case. This appeal followed.

D E C I S I O N

The first issue is whether the district court erred in hearing the school’s motion for summary judgment after the deadline established in the scheduling order for dispositive motions. The scheduling order was entered pursuant to Minn. R. Civ. P. 16, which governs pretrial matters. A district court’s decision to modify a pretrial order is reviewed under an abuse-of-discretion standard. See Cortroneo v. Pilney, 343 N.W.2d 645, 648 (Minn. 1984). Minn. R. Civ. P. 16.05 states that a pretrial order entered after a conference with parties shall be modified only to prevent manifest injustice. The following factors determine whether modification is appropriate: (1) the degree of prejudice to the party seeking the modification; (2) the degree of prejudice to the party opposing the modification; (3) the impact of a modification at that stage of the proceedings; and (4) the degree of willfulness, bad faith, or inexcusable neglect by the party seeking the modification. Cortroneo, 343 N.W.2d at 649.

In June 2003, the district court issued a scheduling order that stated that all dispositive motions must be served and filed no later than March 1, 2004. The scheduling order also stated that discovery should be completed by February 1, 2004; that the pretrial settlement conference should take place on March 1, 2004; that both parties should file complete witness and exhibit lists for the pretrial conference; and that the trial should begin on March 15, 2004.

The scheduling order timetable was modified. Discovery continued throughout 2004 and included appellants serving a request for the production of documents in October 2004. The trial was rescheduled for December 2004.

Next, we apply the Cortroneo factors to this case. The first is prejudice to respondent. Respondent would have been prejudiced by a failure to depart from the scheduling order because disposition by summary judgment avoided the time and expense of proceeding with a trial. The second factor is prejudice to appellant. Prejudice to appellants was minimal because they already had the benefit of extended discovery. In any event, appellants had an opportunity to respond to the motion and did not indicate that they intended to file any additional evidence. The third factor is impact on the proceeding. Respondent filed its motion for summary judgment in September, approximately three months before the rescheduled trial was to begin. Except for the original scheduling order, nothing at that stage of the proceeding would preclude respondent from bringing a motion for summary judgment. Finally, there are no allegations of bad faith or inexcusable neglect. In these circumstances, the district court did not abuse its discretion in hearing the summary judgment motion.

II.

The second issue is whether the district court erred in dismissing appellants’ claim for defamation.

In an appeal from a grant of summary judgment, appellate courts determine if there are any genuine issues of material fact and if the district court erred in its application of the law. N. States Power Co. v. Minn. Metro. Council, 684 N.W.2d 485, 491 (Minn. 2004). This court must “view the evidence in the light most favorable to the party against whom summary judgment was granted.” Westrom v. Minn. Dep’t of Labor & Indus., 686 N.W.2d 27, 32 (Minn. 2004). “[A] ‘genuine issue’ of material fact for trial ‘must be established by substantial evidence.’” DLH, Inc. v. Russ, 566 N.W.2d 60, 70 (Minn. 1970) (quoting Murphy v. Country House, Inc., 307 Minn. 344, 351, 240 N.W.2d 507, 512 (1976)). “The party opposing summary judgment may not establish genuine issues of material fact by relying upon unverified and conclusory allegations, or postulated evidence that might be developed at trial, or metaphysical doubt about the facts.” Dyrdal v. Golden Nuggets, Inc., 689 N.W.2d 779, 783 (Minn. 2004).

To establish a claim for defamation, the claimant must offer proof of (1) a false statement; (2) communication to a third party; and (3) resulting harm to the claimant’s reputation and standing in the community. Weinberger v. Maplewood Review, 668 N.W.2d 667, 673 (Minn. 2003); Stuempges v. Parke, Davis & Co., 297 N.W.2d 252, 255 (Minn. 1980). Ordinarily, the originator of the defamatory statement also publishes the statement to a third-party, but in the area of employment law, Minnesota courts have adopted the doctrine of compelled self-publication as a narrow exception to the general rule. Lewis v. Equitable Life Assurance Soc. of the U.S., 389 N.W.2d 876, 888 (Minn. 1986). Under this doctrine, a claimant who has been compelled by the circumstances to “publish” statements about himself may hold the originator of the statements liable. See id.

In Lewis, four employees who were discharged for gross insubordination brought an action against their former employer arguing that they were defamed because the employer knew that they would have to repeat the reason for their discharges to prospective employers. Id. at 880. The Lewis court found that in “an action for defamation, the publication requirement may be satisfied where the plaintiff was compelled to publish a defamatory statement to a third person if it was foreseeable to the defendant that the plaintiff would be so compelled.” Id. at 888. A critical element of the doctrine of compelled self-publication is the element of compulsion - the doctrine only applies when “the originator knows, or should know, of circumstances whereby the defamed person has no reasonable means of avoiding publication of the statement or avoiding the resulting damages.” Id. Also, plaintiffs have a duty to mitigate “when they encounter a situation in which they are compelled to repeat a defamatory statement to take all reasonable steps to attempt to explain the true nature of the situation and to contradict the defamatory statement.” Id.

Here, the alleged defamatory statements occurred during a conversation between appellants and school officials held approximately two days after the burglary. Appellants claim that the defamatory statements were accusations by school officials that “our boys were in fact trespassing, that they were associated with the fourth person in the break-in, with the vandalism.” Appellants argue that they were compelled to self-publish the false statements because of their disclosures to the following: the individual in charge of admissions, the athletic director, and the principal at St. Cloud Technical High School, a police youth organization, St. Cloud State University, and Mrs. Schackmann’s employer. These disclosures included stating that a burglary occurred, that Adam was suspended, and that school officials believed that Adam was lying, had vandalized the school, and had stolen items from the school.

Appellants concede that the self-publication cases arise primarily in the employment setting, and appellants ask us to extend the self-publication concept to withdrawals from school. Although it is possible for a claimant to be compelled to self-publish defamatory statements in the school setting, there is no evidence that appellants were so compelled in this case. Adam withdrew and the suspension was not on his record. We decline to assume appellants were compelled to self-publish the specific statements by the school officials. Because appellants have not made a prima facie showing that they were compelled to self-publish, their claim for defamation fails, and we do not need to decide whether there are genuine issues of material fact as to whether the statements were false or whether the school’s statements were privileged.

III.

The third issue is whether the district court erred in dismissing appellants’ claim for negligent infliction of emotional distress. In a claim for negligent infliction of emotional distress, a plaintiff “may recover damages for mental anguish or suffering for a direct invasion of his rights, such as defamation, malicious prosecution, or other willful, wanton or malicious conduct.” Bohdan v. Alltool Mfg., Co., 411 N.W.2d 902, 907 (Minn. App. 1987), review denied (Minn. Nov. 13, 1987). When a claim proceeds on this theory, failure of the defamation claim precludes recovery for negligent infliction of emotional distress. Covey v. Detroit Lakes Printing Co., 490 N.W.2d 138, 144 (Minn. App. 1992). Because we conclude the district court properly granted summary judgment with respect to the claim for defamation, the claim for negligent infliction of emotional distress is not viable.

IV.

The fourth issue is whether the district court erred in finding that the school was not a state actor and dismissing appellants’ due-process claim. The Fourteenth Amendment prohibits the states from denying federal constitutional rights and guarantees due process, and it applies to acts of the states, not to acts of private persons or entities. Rendell-Baker v. Kohn, 457 U.S. 830, 837-38, 102 S. Ct. 2764, 2769 (1982).

Appellants argue that the school was a state actor because a school counselor position was funded by the state. Respondent cites Supreme Court precedent that states that public funding does not make a program’s administrative decisions acts of the state. Blum v. Yaretsky, 457 U.S. 991, 1005-1012, 102 S. Ct. 2777, 2786-90 (1982); Rendell-Baker, 457 U.S. at 840-41, 102 S. Ct. at 2771 (1982). In Rendell-Baker, six employees were terminated from a high school and brought an action alleging that the terminations violated their due-process rights. 457 U.S. at 834, 102 S. Ct. at 2767-68. The school was a nonprofit institution and received more than 90% of its revenue from public funds. Id. at 833, 102 S. Ct. 2766-67. The Supreme Court held that “the school’s receipt of public funds does not make the discharge decisions acts of the State” and that “the school’s fiscal relationship with the State is not different from that of many contractors.” Id. at 840, 843, 102 S. Ct. at 2771, 2772. According to the Court, even if these private contractors only perform public contracts, their acts are not those of the government. Id. at 841, 102 S. Ct. at 2771.

Here, it is undisputed that the school is a private, religious school. One of the nine members of the SAT committee is a publicly funded school counselor who was present during the SAT discussion and voted on SAT’s decision to recommend suspension for all three students. Without legal support, appellants reiterate their argument that because one member of the SAT committee was publicly funded and the SAT committee made a recommendation that the principal and the dean of students chose to follow, this transformed the school into a state actor. But according to Rendell-Baker, the school maintains its private character even though it receives partial government funding. In this case the funding is limited. Therefore, the district court did not err in dismissing appellants’ due-process claims because respondent is not a state actor.

The fifth issue is whether the district court erred in dismissing appellants’ breach-of-contract claim. Appellants argue that the school’s handbook created a contract between appellants and the school. Minnesota courts have found that handbooks can create unilateral contracts between employees and employers. See, e.g., Pine River State Bank v. Mettille, 333 N.W.2d 622, 626-27 (Minn. 1983). Minnesota has not explicitly found that a handbook can form a contract between a student and a private school, and we do not reach that question in this case. See Rollins v. Cardinal Stritch Univ., 626 N.W.2d 464, 471 (Minn. App. 2001); Ross v. Univ. of Minn., 439 N.W.2d 28, 34 (Minn. App. 1989), review denied (Minn. July 12, 1989).

“A breach of contract claim fails as a matter of law if the plaintiff cannot establish that he or she has been damaged by the alleged breach.” Jensen v. Duluth Area YMCA, 688 N.W.2d 574, 578-79 (Minn. App. 2004). One measure of damages for breach of contract is the amount that will place the plaintiff in the same situation as if the contract had been performed. Logan v. Norwest Bank Minn., N.A., 603 N.W.2d 659, 663 (Minn. App. 1999). “[T]here can be no recovery for damages which are remote, conjectural, or speculative.” Carpenter v. Nelson, 257 Minn. 424, 428, 101 N.W.2d 918, 921 (1960). But damages need not be proved with certainty; it is legally sufficient that a reasonable basis for approximating loss is shown. See Polaris Indus. v. Plastics, Inc., 299 N.W.2d 414, 419 (Minn. 1980). Additionally, extra-contractual damages, including those for emotional distress, are not recoverable for breach of contract except in those rare cases when the breach is accompanied by an independent tort. Lickteig v. Alderson, Ondov, Leonard & Sween, P.A., 556 N.W.2d 557, 561 (Minn. 1996).

Here, appellants concede that it is not possible to put Adam back in the position he would have been in had respondent not breached its alleged contract. Rather, they claim that they were damaged because Adam did not receive a diploma from Cathedral High School, which is well regarded in the community. But Adam enrolled in and graduated from a public high school. The lack of a diploma from Cathedral High School did not prevent him from attending college. On the contrary, Adam was admitted to every college to which he applied. Appellants also claim that Adam did not receive awards or acknowledgement for activities that he participated in at the school and was prohibited from participating in sports due to respondent’s breach. However, the district court found, and appellants do not dispute, that the tuition was fully refunded and Adam was able to play lacrosse at Technical High School. The claimed damages are remote and speculative and do not constitute compensable damages in a breach-of-contract claim. Therefore, the district court did not err in dismissing appellants’ claim for breach of an alleged contract.

Affirmed.