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JORGE F. FERRER,
M.D., Appellant v. TRUSTEES OF THE UNIVERSITY OF PENNSYLVANIA, MICHAEL AIKEN,
PROVOST, BARRY S. COOPERMAN, VICE-PROVOST FOR RESEARCH, EDWIN ANDREWS, DEAN OF
SCHOOL OF VETERINARY MEDICINE, AND JEFFREY ROBERTS, ASSOCIATE DEAN OF SCHOOL OF
VETERINARY MEDICINE, Appellees Nos. 52 and 53 EAP
2000 SUPREME COURT OF
PENNSYLVANIA 573 Pa. 310; 825
A.2d 591; 2002 Pa. LEXIS 3017 October 15, 2001,
Argued December 30, 2002,
Decided SUBSEQUENT HISTORY: [*1] As
Amended July 8, 2003. Reargument denied by Ferrer v. Trs. of the Univ. of Pa.,
2003 Pa. LEXIS 1167 (Pa., July 8, 2003) PRIOR HISTORY: Appeal from the judgment of the
Superior Court entered on May 9, 2000 at 1758 EDA 1999 and 1988 EDA 1999
reversing the judgment entered on May 20, 1999 in the Court of Common Pleas of
Philadelphia County, Civil Division, at 3225 June Term 1992. Trial Court Judge:
Amanda Cooperman, Judge. Intermediate Court Judges: J. Michael Eakin, Michael
T. Joyce and Patrick R. Tamilia, JJ. Ferrer v. Trustees of Univ. of Pa., 759
A.2d 28, 2000 Pa. Super. LEXIS 708 (Pa. Super. Ct., 2000) Ferrer v. Trustees of Univ. of Pa., 759 A.2d 28, 2000 Pa. Super.
LEXIS 4107 (Pa. Super. Ct., 2000) COUNSEL:
For Jorge F. Ferrer, APPELLANT: Thomas A. Sprague, Esq. and Joseph R.
Podraza, Esq. For Trustees of the U. of P., et al., APPELLEE: David Rudovsky,
Esq. JUDGES:
MR. CHIEF JUSTICE ZAPPALA. Mr. Justice Nigro did not participate in the
consideration or decision of this case. Former Chief Justice Flaherty did not
participate in the decision of this case. Dissenting opinions of Mr. Justice
Cappy and Madame Justice Newman to follow. OPINIONBY:
ZAPPALA OPINION:
MR. CHIEF JUSTICE ZAPPALA This is an appeal by Dr. Jorge F. Ferrer from the Memorandum
Opinion and Order of the Superior Court reversing the judgment of the
Philadelphia County Court of Common Pleas that had been entered following a
jury's award of $ 5,000,000 in damages to Dr. Ferrer in his breach of contract
claim against the Appellees. The Superior Court also determined that judgment
should be entered in favor of the Appellees and remanded the matter for
proceedings consistent with its decision. We granted allocatur to address the
following issues: (1) whether the Superior Court erred in finding that Dr.
Ferrer did not sustain compensable
[*2] damages and
thus was unable to establish that he suffered harm from the University of
Pennsylvania's breach of contract; and (2) whether the Superior Court erred in
finding that the jury instructions were insufficient and would warrant a new
trial. In short, we conclude that the trial court did not err in denying
judgment n.o.v. to the Appellees because Dr. Ferrer adequately established that
a breach of contract by the University caused him harm, and that the trial
court properly denied the Appellees' request for jury instructions limiting the
basis for their award of damages. We also conclude, however, that the award of
damages must be reduced from $ 5,000,000 awarded by the jury to $ 2,900,000,
plus prejudgment interest to be determined on remand to the common pleas court. On June 19, 1992, Dr. Ferrer initiated this action by filing a
writ of summons. On April 29, 1993, a complaint was filed asserting several
causes of action, including breach of contract and conspiracy to breach his
employment agreement, against the Trustees of the University of Pennsylvania
and several university administrators. n1 The complaint asserted that Appellees
had breached Dr. Ferrer's rights under the [*3]
University's Procedures Concerning Misconduct in Research when Dean
Edwin Andrews of the School of Veterinary Medicine unilaterally imposed
sanctions upon Dr. Ferrer that precluded him from conducting or supervising
research on human leukemia virus for a period of two years. - - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - -
- n1 The administrators included Provost Michael Aiken, Vice-Provost
for Research Barry S. Cooperman, Dean of the School of Veterinary Medicine
Edwin Andrews, and Associate Dean of the Veterinary School Jeffrey Roberts. - - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - - The Procedures Concerning Misconduct in Research established
procedures for handling research misconduct by standing and associated faculty.
n2 The complaint alleged that the Procedures constituted part of Dr. Ferrer's
contract with the University. Pursuant thereto, an investigation was conducted
into the handling of Dr. Ferrer's research program in June of 1990, for reasons
that will be addressed in detail. - - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - -
- n2 Misconduct is defined thereunder as "fabrication,
falsification, plagiarism, or other serious deviation from accepted practices
in proposing, carrying out, or reporting results from research." R. 41a. - - - - - - - - - - - - End Footnotes- - - - - - - - - - - - -
- [*4] Following the investigation, the Formal Investigative Committee
determined that Dr. Ferrer was not guilty of misconduct. The Procedures
specifically provided that if the report of the formal investigation committee
finds the charges to be unfounded, the matter shall be dropped and the
concerned parties shall be informed. The dean and the Provost have the
responsibility to take an active role to repair any damage done to the reputation
of the respondent or the complainant (provided the complainant acted in good
faith), and to take appropriate action should they determine that the
accusation was knowingly false. R. 45a. The complaint alleged that despite the committee's findings, Dean
Andrews and Provost Aiken imposed severe penalties on Dr. Ferrer as if he had
been found guilty of misconduct. The penalties prohibited Dr. Ferrer from
conducting any animal research for two years, including research involving
human leukemia virus (HTLV-I) and bovine leukemia virus, and prohibited Dr.
Ferrer from conducting any research, including laboratory work on HTLV-I or any
other human pathogens for two years. The complaint alleged that Dean Andrews
lacked the authority to impose such sanctions [*5]
upon Dr. Ferrer after the Formal Investigative Committee had determined
that Dr. Ferrer was not guilty of misconduct in research. It was further
alleged that, as a result of the sanctions, Dr. Ferrer was not able to continue
his research or maintain his laboratory. The matter was tried before a jury. The jury found in favor of Dr.
Ferrer and awarded damages in the amount of $ 5,000,000. A jury verdict form
was completed by the jurors that set forth the following questions and
responses regarding the issues submitted for their deliberation: 1. Were the Procedures Concerning Misconduct in Research part of
the terms and conditions of Dr. Ferrer's contract of employment with the
University of Pennsylvania? [The jury checked "Yes.''] 2. Did the defendants breach or violate Dr. Ferrer's employment
contract or the terms and conditions thereof? [The jury checked "Yes."] 3. Did you find that Dr. Ferrer was harmed by any breach or
violation of his employment contract or any terms and conditions thereof? [The jury checked "Yes."] 4. State the amount of money, if any, you would award to
compensate Dr. Ferrer for the breach or violation of his employment contract or
the terms and [*6] conditions thereof? [The jury responded "$ 5 million."] 5. Did you find that two or more of the individual defendants,
that is, defendant Michael Aiken, defendant Barry S. Cooperman, and/or
defendant Edwin Andrews, conspired or acted in concert to breach or violate Dr.
Ferrer's employment contract or the terms and conditions thereof? [The jury checked "Yes."] R. 2169-2170a. The Appellees filed a motion for post-trial relief, seeking
judgment n.o.v. or, alternatively, a new trial. They also filed a motion for
remittitur, claiming that the award of damages was arbitrary, excessive and
unsupported by the evidence. Dr. Ferrer filed a conditional motion for
post-trial relief. On May 20, 1999, the trial court denied Appellees'
post-trial motion, dismissed Dr. Ferrer's motion as moot, and entered judgment
for Dr. Ferrer. The Appellees appealed to the Superior Court; Dr. Ferrer then
filed a conditional cross-appeal. On May 9, 2000, a panel of the Superior Court
issued a memorandum opinion and order, reversing the judgment of the trial
court and concluding that judgment should have been entered in favor of the
Appellees. We granted Dr. Ferrer's petition for allowance of appeal [*7] on December 7, 2000. In Adamski v. Miller, 545 Pa. 316, 681 A.2d 171 (Pa. 1996), we
stated: the proper standard of review for an appellate court when examining
the lower court's refusal to grant a judgment n.o.v. is whether, when reading
the record in the light most favorable to the verdict winner and granting that
party every favorable inference therefrom, there was sufficient competent
evidence to sustain the verdict. Wenrick v. Schloemann-Siemag
Aktiengesellschaft, 523 Pa. 1, 4, 564 A.2d 1244, 1246 (1989). Questions of
credibility and conflicts in the evidence are for the trial court to resolve
and the reviewing court should not reweigh the evidence. Commonwealth, Dep't of
Transp., Bureau of Traffic Safety v. Korchak, 506 Pa. 52, 57, 483 A.2d 1360,
1362 (1984). Absent an abuse of discretion, the trial court's determination
will not be disturbed. 681 A.2d at 173. Applying this standard of review, the evidence established the
following facts. n3 In 1957, Dr. Ferrer obtained his medical degree in
Argentina. Several years later, he decided to become a research scientist and
dedicate his career to leukemia and cancer research. [*8] He came to the United States in 1964
for this reason and eventually became a U.S. citizen. n4 After receiving the
Eleanor Roosevelt Fellowship from the International Union of Cancer, he went to
Stanford University in California where he worked as a research associate. - - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - -
- n3 In order to understand the context in which the issue of
damages arose, it is necessary to set forth a detailed statement of the facts
giving rise to Dr. Ferrer's claim for breach of contract. The focus of our
inquiry is limited to the damages that were awarded by the jury. The existence
of an employment agreement and the breach of that agreement by the University
are not in dispute before this Court. n4 Dr. Ferrer left his homeland because he believed that American
universities were committed to supporting and encouraging freedom of research.
This was particularly important to him coming from a country that he described
as "very authoritative" and where "you are sometimes treated arbitrarily
from pursuing your career." R. 1461a. - - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - - Dr. Robert [*9] R. Marshak, a professor of the
University of Pennsylvania for 37 years and Dean of the School of Veterinary
Medicine for 17 of those years, recruited Dr. Ferrer to join the University to
become involved in research into the disease of bovine leukemia in cattle.
Bovine leukemia in cattle was described by Dr. Marshak as a disease that is
very similar to a form of leukemia in humans. Dr. Marshak had a group that was
doing research into how the disease occurred, in what distribution, and in what
breeds of cattle. Dr. Marshak decided that they needed to develop a very
sophisticated laboratory to study the fundamental questions raised by their studies.
It was then that Dr. Marshak began to recruit Dr. Ferrer. Dr. Ferrer's
background in tumor immunology was important in addressing why some animals
contracted the disease and other animals did not. He expected Dr. Ferrer to
develop a large laboratory group that would study the various aspects of bovine
leukemia. Dr. Ferrer agreed to join the University because of his interest
in the bovine leukemia in cattle. Dr. Ferrer felt that the treatment of
leukemia in cattle offered unusual opportunities to understand the role of
viruses and the cause [*10] of leukemia in
relation to humans. He expected the research involving bovine leukemia would
provide opportunities that were not available in the studies of leukemia in
mice that were prevalent at the time. Dr. Ferrer was offered a position of associate professor at the
University initially without tenure, but with an assurance that he would be
offered tenure within 5 years. He served as the head of the Veterinary School's
comparative leukemia unit and its viral oncology section. n5 He received tenure
before the expiration of the 5 year period. - - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - -
- n5 Viral oncology involves the relationship between viruses and
all types of cancer, including leukemia. R. 1466a. - - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - - When Dr. Ferrer arrived at the University, he wanted to develop a
new model for studies of human leukemia. He used the bovine leukemia as the
basis of his model. In order to develop this model, the first requirement was
to demonstrate that leukemia in cattle was due to a virus. R. 1471a. Dr. Marshak testified that through the years, Dr. Ferrer
identified [*11] the virus, demonstrated that the virus was
the real cause of the disease, and described the mode of transmission of the
virus from animal to animal. Dr. Ferrer developed sensitive and reliable tests
to identify the animals that were infected with the virus. He was also able to
clone the genome of the virus. n6 Dr. Ferrer established that the bovine
leukemia virus was fundamentally different from all known leukemia viruses and
predicted in one of his publications that if a human leukemia virus was
identified, it would be a relative of the bovine leukemia virus. His theory
ultimately proved to be correct. R. 533a-536a. - - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - -
- n6 Dr. Marshak explained that the genome "is the genes that
are in the virus that tell the virus what to do when it's injected in the
body." R. 534a. - - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - - Dr. Ferrer set out to develop the bovine leukemia system, which he
described as "a very systematic and painstaking process." The virus
had to be grown in large quantities for study. Once the properties of the
viruses were examined, studies were done [*12] to
identify how the virus was transmitted from one animal to another. The
information that was gathered was intended to be applied to the study of human
leukemia. R. 1475a. Dr. Ferrer recruited and trained scientists to assist him in his
research program. At the same time, he had to attract funding to sustain his
research. From the beginning, Dr. Ferrer's research was sustained by the
funding that he obtained. His funding efforts enabled him to pay for the
salaries of all of the people who worked in his laboratory, including
technicians, assistant professors, research associates and secretaries. Dr.
Ferrer was responsible as well for the costs of animals purchased for use in
his experiments and for maintaining the animals that he used in his research.
R. 539a-541a, 669a, 1472-1474a. One of the major resources that Dr. Ferrer developed was a herd of
cattle that was considered by Dr. Marshak to be a "national treasure"
for research purposes. Dr. Marshak indicated that the herd was "the only
one of its kind in the world." R. 540a. The particular characteristic of
the herd that made it so important was that two kinds of families had been
identified within the herd for purposes of the [*13] disease.
Studies had indicated that some families always contracted leukemia, but other
families in the same environment that were treated the same never contracted
the disease. R. 533a. This unique characteristic of the herd was essential to
Dr. Ferrer's research into what mechanism triggered some infected animals to
develop leukemia, while others did not. R. 1473a. With these resources in place, Dr. Ferrer investigated whether a
blocking factor might exist in the animals that functioned as a natural defense
against infection by preventing the virus from replicating and reaching target
cells. It was anticipated that the identification of a blocking factor would
explain a crucial characteristic of the infections caused by human leukemia virus
as well as the bovine leukemia virus. As with the bovine leukemia virus, the
human leukemia virus did not result in disease in every incident of exposure.
n7 His hypothesis was that the same blocking factor was operating in the case
of humans. He believed that once purified and made available in larger
quantities, the blocking factors would provide a very powerful tool to treat
leukemia and to prevent infected people from eventually developing [*14] leukemia.
R. 1476a-1478a. - - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - -
- n7 Dr. Ferrer testified that the large majority of people infected
with human leukemia virus do not develop leukemia. R. 1478a. - - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - - In the course of his research, Dr. Ferrer discovered a soluble
factor in the plasma of diseased animals that prevented infected cells from
producing more virus. He also discovered a factor in the plasma that stimulated
the expression of the virus. Dr. Marshak explained that this was a novel
discovery at the time that later became "one of the hottest issues in
leukemia research." R. 536a-537a. Dr. Ferrer designed an experiment for the development of an animal
model for the human leukemia virus (HTLV-I) using sheep and cattle. The purpose
of the program was to study a number of events regarding susceptibility and
resistance to the disease and the mechanism by which the virus causes the
disease. He submitted a protocol, entitled Transmission of HTLV-I to Cattle and
Sheep, to the Institutional Animal Care and Use Committee (IACUC) for the
experiment. The protocol [*15] was approved by EHSO
on March 6, 1990, and subsequently by IACUC on March 29, 1990. The approval
specified that "Biosafety Level 2 Practices and Procedures must be
followed." n8 R. 49a, 538a, 1486a. - - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - -
- n8 The protocol indicated that 12 to 14 sheep and 6 heifers were
to be used in the experiment. The animals were to be inoculated with human blood
lymphocytes infected with HTLV-I. The sheep were to be housed in Leukemia Barn
E and the cattle would be kept in the leukemia field. - - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - - After he obtained approval for the experiment, Dr. Ferrer began
his efforts to locate lambs for inoculation. The University's New Bolton Center
routinely sold lambs to investigators for research purposes. Dr. Ferrer
negotiated the purchase of the lambs for his research with Dr. Coyne, the
veterinarian who was in charge of the teaching flock of animals. Dr. Ferrer
explained to Dr. Coyne that he would be conducting an experiment that would
involve the inoculation of lambs with HTLV-I and the general purpose of the
experiment. Dr. Coyne selected [*16] the lambs that were
being assigned to the experiment and put tags on the ears of the lambs to
distinguish them from the other lambs. R. 1512a-1513a. The practice was to seek authorization from the principal
investigator of a research project, in this case Dr. Ferrer, before any
procedures could be conducted on animals involved in a research project. Dr.
Ferrer never authorized any kind of invasive procedures to be conducted on the
lambs that were involved in the experiment. He indicated that the conditions of
the experiment would have been nullified by such procedures and could have
resulted in stress or death to the animals. R. 1513a-1514a. Despite the established practice, veterinary students performed
invasive procedures, such as tail-docking and castration, on the lambs involved
in Dr. Ferrer's research, and Dr. Coyne permitted children to pet the lambs
during tours of New Bolton Center, without Dr. Ferrer's authorization. Dr.
Ferrer was never consulted about the use of the animals by the veterinary
students or the children's contact with the lambs. Id. Dr. Bernard Poiesz was involved in the discovery of the human
leukemia virus in 1978 while working with the National Cancer [*17] Institute.
He was also involved in extensive epidemiological studies to determine the mode
and manner of transmission of HLTV-I. HTLV-I was described as a retrovirus that
is transmitted in the same way that HIV is passed, i.e., sexual intercourse,
breast feeding, blood transfusions, and the sharing of needles among
intravenous drug abusers. HTLV-I is not transmitted by casual contact. Dr.
Poiesz indicated that there was virtually no risk to the children and "a
very infinitesimally small risk to [the] veterinary workers" in this case.
There was no scientific evidence of a person ever having contracted leukemia
under such circumstances, a fact known to the medical community when this
incident occurred in 1990. R. 917a, 929a-939a. When it was discovered that veterinary students and children had
come into contact with the lambs, IACUC suspended Dr. Ferrer from further
animal research pending the outcome of an investigation. Dr. Ferrer was able to
supervise others, however, with respect to the animal research. This enabled
the other researchers who worked with Dr. Ferrer to continue the animal
research during this time. No restrictions were placed on Dr. Ferrer's ability
to work with [*18] HTLV-I in the laboratory. R. 1539a-1540a. The University's Handbook for Faculty and Academic Administrators
sets forth the rights and privileges for members of the standing faculty. The
Handbook states: The protection of academic freedom of individual teachers and
scholars is the instrument by which society at large is protected from
hindrances to the search for knowledge and from limits on the dissemination of
knowledge. The statutes of the University hold that a system of tenure for
faculty members is the preeminent means of fostering and protecting academic
freedom of the faculty in teaching and in scholarly inquiry. The tenure system consists of rules and procedures which establish
an essentially self-regulated body of scholars enjoying the continuity of
existence and economic security within which academic freedom is both fostered
and protected. The protections of academic freedom are extended to all members
of the faculty during their terms of appointment. The rights and privileges
embodied in the tenure system are extended to all members of the Standing
Faculty during their terms of appointment. R. 523a-524a. The Handbook provides for Procedures Concerning
Misconduct [*19] in Research, which establishes the procedures
to be followed when allegations of misconduct in research have been made
against faculty members. On June 11, 1990, Dean Andrews initiated an investigation into the
incident pursuant to the Procedures Concerning Misconduct in Research. Under
the Procedures, the dean is required to appoint a preliminary inquiry committee
consisting of at least two individuals. The preliminary hearing committee is
charged with the responsibility of gathering information and determining
whether the allegation warrants a formal investigation. The committee then
submits a written report of its findings, with a copy to the Provost,
complainant and respondent. The respondent is given an opportunity to submit a
written reply to the report. When the report of the preliminary inquiry committee finds that a
formal investigation is not warranted, the dean may: (1) initiate a formal
investigation despite the recommendation of the preliminary inquiry committee,
(2) not initiate a formal investigation, but take other action as the
circumstances warrant, or (3) drop the matter. The decision is reviewed by the
provost. When the report of the preliminary inquiry committee [*20] finds that
a formal investigation is warranted, or the dean or provost decides that a
formal investigation should be conducted, then the dean is required to notify
the complainant and respondent, identify the complainant to the respondent and
initiate a formal investigation as specified by the Procedures. The preliminary inquiry committee submitted its report and
recommended that there be a formal investigation. The committee indicated that
it felt that a formal investigation was needed "to determine the exact
seriousness of the risk to University personnel and students and the public and
whether culpability exists among the individuals indicated and with the
University procedures." n9 R. 57a - - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - -
- n9 The preliminary inquiry committee indicated that Dr. Ferrer, as
the principal investigator, was primarily responsible for knowing and adhering
to the restrictive conditions applicable to his research. It determined that
Dr. Ferrer did not ensure limited access to the inoculated lambs and did not
post warning biohazard signs because he did not know that was required. In
part, the committee attributed that to Dr. Ferrer's knowledge that animals
infected with HTLV-I do not pose a threat to humans or other animals because
the possibility of transmission is so remote. The committee questioned, however, whether the regulatory
procedures of the University were adequate to inform investigators about the
Biosafety Level 2 requirements. The committee identified several lapses in the
University's procedures that it believed had contributed to Dr. Ferrer's
failure to implement the Biosafety Level 2 practices. The committee observed
that the University Biological Safety Manual provided to researchers failed to
identify limited access to the animals as one of the Biosafety Level 2
practices. The committee concluded that the University's Environmental Health
and Safety Office should have done more "to insure that investigators know
what provisions must be implemented to satisfy the specific requirements
associated with their assigned biosafety level." R. 54a-56a. Based upon these concerns, the committee identified the following
as "Improvements Necessary in Current Procedures": (1) An uncomplicated mechanism should be implemented to insure
that all investigators are aware of the specific requirements associated with
their assigned Biosafety Level designations before approval is given to a
study. (2) The CDC-NIH manual or better piece of literature should be
distributed to all principal investigators assigned a Biosafety Level
designation and to all other investigators who request it by the University
free of charge. (3) An EHSO representative should be present at the New Bolton
Center. R. 57a. - - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -
[*21] Pursuant to the Procedures, to initiate a formal investigation,
the dean is required to appoint a formal investigative committee of not less
than three individuals. None of the individuals who were members of the
preliminary inquiry committee may be appointed. The Procedures define the
responsibility of the formal investigative committee as follows: The formal investigative committee shall undertake a thorough
examination of the charges, including, without limitation, a review of all relevant
research data and proposals, publications, correspondence, and memoranda of
telephone calls. Whenever possible, interviews shall be conducted with the
complainant and respondent, as well as others having information regarding the
allegations. Summaries of the interviews shall be prepared, provided to the
interviewed party for comment or revision and included as part of the
investigatory file. During its proceedings the committee shall have access to
and consult legal counsel. When appearing before the committee, the respondent
and the complainant may each be accompanied by an adviser, who may be a lawyer
but who may not participate in the proceedings. The committee shall not conduct
formal hearings. [*22] Except in unusual
cases, the respondent and the complainant shall not appear before the committee
at the same time. R. 441a. Dean Andrews appointed the members of the formal investigative
committee. On October 9, 1990, the committee issued a formal report with
respect to its evaluation, findings and conclusions. The committee concluded
that Dr. Ferrer was not guilty of misconduct in research. The committee
regarded its report as a final disposition of the matter. Two weeks after Dean
Andrews received the report, however, the chairman of the committee received a
memorandum from Dean Andrews identifying several individuals that the committee
should interview and outlining several questions that he believed the committee
should answer. The Procedures do not authorize the involvement of a dean in the
formal investigative process once the committee has been established. The
committee elected to interview the individuals identified by Dean Andrews,
despite his interjection into the process, in a spirit of cooperation. The committee reached the same conclusion after the extended
investigation, that Dr. Ferrer was not guilty of misconduct in research. On
December 4, 1990, the committee [*23] sent its report to
Dean Andrews. In its accompanying letter, the committee stated, "we feel
the incident has been explored in fully satisfactory detail in order to make a
judgment as to whether scientific misconduct took place, and it is our firm
opinion that it did not." R. 713a. In its report, the committee recognized the role that a principal
investigator has in animal research experiments. The committee found that, as
principal investigator, Dr. Ferrer was responsible for carrying out the
restrictive conditions that applied to his research. The committee further
determined, however, that the rules that dictated the segregation of the
animals were ambiguous and that, according to the University Biosafety Manual,
the knowledge and judgment of the principal investigator were critical in
assessing the risks and applying the recommendation of the guidelines. The committee
indicated that Dr. Ferrer should have anticipated the possibility that
individuals would have had contact with the animals. The committee concluded that the failure to segregate the lambs
was a violation "of a low order because the likelihood of infectivity from
the types of contact that occurred were very low." [*24] n10
Furthermore, the committee found that the lack of communication among
University Laboratory Animal Resources (ULAR), the Environmental Health and
Safety Office and the ULAR veterinarian assigned to the New Bolton Center
contributed to Dr. Ferrer's error. The committee indicated that this specific
incident could have been easily avoided if the University Laboratory Animal
Resources had a practice of inspecting facilities prior to the start of an
experiment. n11 - - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - -
- n10 The committee noted in its report that all of the published
literature indicated that transmission of HTLV-I by casual contact was
extremely low. n11 The committee referred to "a storm of negative
publicity" regarding the incident, stating that "while we regret the
incident and the part played by Dr. Ferrer, the committee strongly believes
that there was not so serious a deviation as to be considered as misconduct of
research." R. 2164a. - - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - - Once the formal investigation has been completed and the written
report has been submitted by the committee, [*25] the
University's Procedures specify the appropriate action to be taken. The dean
lacks authority to take any action against the respondent when the formal
investigation committee finds that the charges are unfounded. It is only where
the committee finds that the respondent is guilty of misconduct in research
that the dean may proceed to take further actions that are specifically set
forth in the Procedures. 3.2 If the report of the formal investigation committee finds the
charges to be unfounded, the matter shall be dropped and the concerned parties
shall be informed. The dean and the Provost have the responsibility to take an
active role to repair any damages done to the reputation of the respondent or
the complainant (provided the complainant acted in good faith), and to take
appropriate action should they determine that the accusation was knowingly
false. 3.3 If the report of the formal investigation committee finds the
charges against a faculty member to be substantiated, the dean shall proceed to
take whatever actions are appropriate to the seriousness of the offense and in
accordance with University procedures and which consider the previous record of
the respondent. For [*26] major offenses by
members of the standing or research faculties, the dean shall consult with
members of the faculty concerned to aid in determining whether there is
substantial reason to believe that just cause exists for suspension or
termination, and shall take other steps as may be appropriate under the
University's procedure for Suspension or Termination of Faculty for Just Cause.
For less serious offenses, which do not warrant suspension or termination, the
dean may impose penalties including, but not limited to, removal from a
particular project, a letter or reprimand, special monitoring of future work,
probation, or below average salary increases, including zero salary increases,
for one or more years. 3.3 The respondent shall have access to all established University
grievance and appeal procedures in accordance with the stated jurisdiction of
such procedures. 3.4 When the report of the formal investigation committee finds
charges have been substantiated, the Provost shall take appropriate steps to
correct any misrepresentation resulting from the misconduct in question.
Collaborators, professional societies, and other affected institutions and
individuals shall be informed. [*27] If misrepresented
results have been submitted for publication, already published, or otherwise
disseminated into the public domain, appropriate journals and other sponsors
shall be notified. R. 44a-45a. (emphasis added). In disregard of the Procedures, Dean Andrews failed to drop the
matter or take an active role to repair any damage done to Dr. Ferrer's
reputation once the committee's final report was issued. Dean Andrews indicated
that he simply did not agree with the committee's determination that Dr.
Ferrer's actions were not a serious violation. R. 1422a. Dean Andrews imposed
severe sanctions upon Dr. Ferrer after the committee found that Dr. Ferrer was
not guilty of misconduct in research. n12 - - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - -
- n12 The decision to impose sanctions was reached after Dean
Andrews consulted with other administrators, including Provost Michael Aiken
and Vice-Provost Barry Cooperman. R. 1730a. The references to Dean Andrews'
sanctions in this opinion are intended to reflect the collaborative
decision-making of Dean Andrews and those administrators. - - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - - [*28] On January 31, 2001, Dean Andrews sent a letter to IACUC
recommending that restrictions on Dr. Ferrer's authority to conduct animal
research be maintained for an additional two year period. R. 604a. This letter
followed Dean Andrews' meeting with several individuals. By letter dated February 1, 1991, Dean Andrews informed Dr. Ferrer
that the following sanctions would be imposed: (1) Dr. Ferrer was prohibited from conducting or supervising any
studies on the HTLV-I virus, or other known or suspected human pathogens; n13 (2) the University's restrictions on his ability to conduct animal
research would continue for a period of two years; (3) Dr. Ferrer's laboratory would be monitored by the University's
Office of Environmental Health and Safety on an unannounced, periodic basis. (4) [*29] Dr. Ferrer would be
required to successfully complete an approved course on the handling of
biohazardous agents within a two year period. The sanctions imposed by Dean Andrews were broader in scope than
those imposed by IACUC while the University's investigation were pending
because they precluded Dr. Ferrer not only from conducting his research but
also from supervising the laboratory personnel who had continued his animal
research during that time. - - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - -
- n13 The restrictions on Dr. Ferrer's ability to conduct and to
supervise the animal research involving the HTLV-I virus were made retroactive
to June 8, 1990. The prohibition imposed on Dr. Ferrer was to run until June 8,
1992. - - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - - Additional steps were taken by the University to inform
significant funders of Dr. Ferrer's research, including the Kleberg Foundation.
The Kleberg Foundation had been a main source of Dr. Ferrer's funding over the
years. On February 11, 1991, Jeffrey P. Roberts, the University's Assistant
Dean for Development and Planning, sent a letter to the Grants Coordinator for
the Kleberg Foundation. The University's letter advised the Kleberg Foundation
that Dean Andrews, "responding to the serious errors in Dr. Ferrer's
judgement," had imposed the sanctions detailed above. R. 60a-61a. In addition, the letter discussed the remaining funds for Dr.
Ferrer's research that had been the subject of a previous grant by the Kleberg
Foundation, stating [*30] in relevant part: The restrictions on Dr. Ferrer's research place in limbo the
monies received from the Foundation to support the project. As you know, the
research accounts were placed under the control of Dr. Charles Benson, Chairman
of Clinical Studies at New Bolton Center. To date, of the $ 376,605 from the
original grant, $ 225,503 remains. (A budget accounting is attached. On
February 28, 1991, the Office of Research Accounting is scheduled to send its
annual report to the Foundation.) We need the Foundation's guidance as to how to manage the
remaining funds. A number of options may exist; we have identified several:
one, keep the fund frozen until June 8, 1992, when it would become available to
Dr. Ferrer; two, have Dr. Ferrer define a new project within the sanction
guidelines and submit a request to the Foundation for such a redirection;
three, have the School identify an alternative research program conducted by
different faculty and submit a request to the Foundation for a re-allocation;
recognizing that the grant is supporting four research staff in Dr. Ferrer's
laboratory; and, four, return the funds. Perhaps other choices will emerge in your discussions; obviously, [*31] we prefer
not having to return the funds. We want very much to respond to the trustees'
wishes in what is surely a unique circumstance and will, therefore, abide by
your instructions. Id. Members of the academic community responded to Dean Andrews' disregard
of the University's obligations to drop the matter and to restore Dr. Ferrer's
reputation. This was to no avail, however. One of the members of the Formal
Investigative Committee, Dr. Donald F. Patterson, had sent a letter to Provost
Michael Aiken and Dean Andrews after he learned that Dr. Ferrer's research was
being blocked. The letter was sent two days before Dean Andrews imposed the
sanctions. Dr. Patterson testified about his concerns that had prompted him
to send the letter. Q. Why did you send this letter, sir? A. It's a bit complicated. I think, first of all, I should say
that, as I said before, I didn't really know Dr. Ferrer very well prior to this
investigation, but I had an opportunity to hear him speak and know a bit more
about him. I realized that he is a very sincere and honest person, and that in
view of our finding that he was not guilty of misconduct in research. When I realized that during that period [*32] after we
submitted our report that, actually, rather than repairing some of the damage
that had been done to Dr. Ferrer's research situation, restoring his laboratory
of operation, he was, in fact, blocked from continuing his research. I knew
that he was an outstanding research person with original ideas, and he
contributed a great deal to the understanding of blood cancer and that he had
made some recent very important discoveries which were important in the whole
field and potentially important in treatment and perhaps even the cure of
leukemia. So I was very distressed to find out that rather than doing what I
thought was the university's responsibility to do so, to see that he had been
essentially acquitted from the charge, that he was being blocked, his research
could not go forward. So I thought that this was an injustice on the part of
the university, and so I felt I should speak out for that reason. R. 717a-718a (emphasis added). After the sanctions were imposed, the Senate Committee on Academic
Freedom and Responsibility (SCAFR) reviewed a complaint filed by Dr. Ferrer
relating to Dean Andrews' actions. SCAFR was created pursuant to the Statutes
of Trustees, the [*33] operating
constitution by which the University is governed. Under the Statutes of
Trustees, SCAFR is comprised of seven members who are elected by the university
senate of all faculty. The committee's function is to advise and consult with
each of the twelve college faculties that made up the University. In addition,
each of the twelve colleges had its own committee for Academic Freedom and
Responsibility. The committees served to advance the University's stated policy
of maintaining and encouraging "the freedom of inquiry, discourse,
teaching, research and publication" and of protecting "any member of
the academic staff against influences, from within or without the university,
that would restrict him or her in the exercise of these freedoms in his or her
area of scholarly interest." R. 979a, 984a. On May 30, 1991, SCAFR submitted a report. The committee concluded
that once the Formal Investigative Committee had decided that Dr. Ferrer was
not guilty of misconduct in research, that it violated Dr. Ferrer's academic
freedom to prevent him from conducting his research. The committee found that
the sanctions imposed by Dean Andrews were inappropriate and should be
rescinded. SCAFR [*34] concluded also that
the University should provide Dr. Ferrer with assistance as necessary to keep
his laboratory operating so that he could again compete successfully for
external funds. It was further recommended that a suitable letter from a senior
officer of the University should be written to the Kleberg Foundation and other
appropriate agencies. R. 1003a,1010a. Dean Andrews rejected SCAFR's
recommendations. Although the recommendations were not binding on Dean Andrews,
there was no other time that SCAFR had published a report recommending that
sanctions be rescinded and the recommendation was not accepted. R. 1008a-1010a. The effects of the sanctions were devastating. The animal research
that was being conducted by Dr. Ferrer was completely shut down as a result.
Since Dr. Ferrer was prohibited from even supervising the animal research, his
research staff could no longer be supported financially and subsequently left;
his animal colonies were dismantled; and his unique herd of cattle could no
longer be maintained and had to be sold. These resources were critical to Dr.
Ferrer's ability to obtain data necessary to remain current in the area of
retroviruses. Dr. Ferrer estimated [*35] that he
had received over a million dollars in funding from the Kleberg Foundation in
the course of his research, but did not receive "another penny" after
Dean Andrews imposed his sanctions. R. 1559a, 1571a. The University refused to provide Dr. Ferrer with serum samples
and plasma that would have enabled him to continue a small part of his
laboratory research within the parameters of the sanctions. Dr. Ferrer
repeatedly requested that he be provided with samples from June of 1990,
through July of 1991. Dean Andrews acknowledged that there was no reason that
he knew of that additional serum and plasma could not have been obtained from
the sheep and provided to Dr. Ferrer. He also acknowledged that Dr. Ferrer
would have been permitted to use those materials in laboratory research even
under the restrictions that were originally imposed by IACUC when the matter
was originally under investigation. R. 1411a. Nevertheless, the samples were
withheld from Dr. Ferrer for over a year until July 25, 1991. R. 1809a. Based upon this evidence, the jury found that the Procedures
Concerning Misconduct in Research were part of the terms and conditions of Dr.
Ferrer's employment contract with the [*36]
University, that the University had breached the employment agreement by
imposing sanctions on Dr. Ferrer after the Formal Investigative Committee found
that Dr. Ferrer was not guilty of misconduct in research and that Dr. Ferrer
was harmed by the University's breach of his employment contract. The jury
awarded Dr. Ferrer damages in the amount of $ 5,000,000. When the Appellees filed their motion for post-trial relief,
seeking judgment n.o.v. or a new trial, the trial court rejected their claim
that the verdict was not based on sufficient evidence and denied their request
for a remittitur of damages. The trial court reasoned that Dr. Ferrer was
entitled to recover those damages traditionally recognized under Pennsylvania
law for breach of contract. The trial court observed that "the goal of
awarding damages for breach of contract is to make the plaintiff whole again,
by awarding the non-breaching party a sum that would put them in as good a
position as he/she would have been, had the contract been performed."
Trial court slip op. at 6 (citing Trosky v. Civil Serv. Comm'n, 539 Pa. 356,
652 A.2d 813, 817 (Pa. 1995)). The court further noted that in awarding damages
[*37] for breach of contract, the jury was
permitted to consider the non-breaching party's expectation interest,
"which can be measured by (1) the loss in value, to the injured party, of
the breaching party's performance; (2) any other losses, such as those caused
by the breach which are incidental and consequential (3) less, any cost or
other loss the injured party has avoided by not having to perform." Slip
op. at 6-7 (citation omitted). The trial court determined that the jury had reasonably concluded
that $ 5,000,000 was the amount necessary to make Dr. Ferrer whole again for
the loss of his research program. The court based its conclusion upon evidence
that had established that, as a result of the University's improper sanctions,
Dr. Ferrer lost his entire research staff and nationally treasured flock, as
well as evidence regarding the amount of money needed to restore Dr. Ferrer's
program to its pre-existing level when the sanctions were imposed. The Superior Court reversed the trial court, finding that Dr.
Ferrer did not suffer any damages whatsoever from the breach of his employment
contract, since, in its view, the only basis for a claim for damages could be a
claim for loss of [*38] future funding. On
this basis, the court found that judgment should be entered in favor of the
Appellees. The court also found that the trial court's instructions regarding
damages were improper, but found it unnecessary to award a new trial based on
its reversal of the judgment for Dr. Ferrer. Dr. Ferrer asserts that the Superior Court erred in determining
that he did not suffer any damages as a result of the sanctions. He argues that
the evidence was uncontroverted that he had a contract of employment and that,
as part of the terms and conditions of his employment contract, the Appellees
could not impose the improper sanctions that had the effect of destroying his
ability to continue the research program he had developed and cultivated for
over twenty years. Dr. Ferrer asserts that the jury properly awarded damages
arising from the Appellees' improper interference with his contractually
protected interest to pursue his research. Moreover, Dr. Ferrer asserts that
the jury properly based its award in this regard on the evidence that he
presented at trial. We agree. We find that the Superior Court erred in characterizing Dr.
Ferrer's claim for damages as one necessarily involving [*39] the loss
of future funding by third parties. This was not the basis for the jury's award
of damages. Dr. Ferrer's claim for damages was not premised on funding that he
was projecting to receive in the future. Nor did Dr. Ferrer claim to have lost
any salary or benefits. R.1923a, 1931a. Instead, he sought to recover damages
sustained by the University's actions that halted his ability to perform his
scientific research, as the University's breach resulted in the complete
dismantling and destruction of his research program. Dr. Ferrer's pursuit of
damages in this regard was appropriate based upon traditional principles of
contract law. The fundamental principles of contract law applicable to a tenured
professor's claim for breach of contract were explained in our recent decision
in Murphy v. Duquesne University, 565 Pa. 571, 777 A.2d 418 (Pa. 2001). n14 In
Murphy, the tenured professor had been terminated from his employment with
Duquesne University after the University's president determined that the
professor had engaged in serious misconduct. The professor sued the University
for breach of his tenure contract. The University filed a motion for summary
judgment [*40] that was granted by the common pleas court
and affirmed on appeal. We granted allocatur to determine the applicable
standard of review from the grant of summary judgment in a contract action
involving judicial review of internal university decisions. - - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - -
- n14 We note that the Superior Court did not have the benefit of
our analysis in Murphy as our decision was issued after the court's memorandum
opinion in this case. - - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - - The tenured status of the professor was provided for by contract.
Pursuant to the faculty handbook issued by Duquesne University, the professor
was entitled, as a tenured faculty member, to renewal of his employment until
he reached age 70 or retired. Under the University's 1985 Statutes, which were
incorporated into the faculty handbook, a professor could forfeit his tenure by
serious misconduct or for professional incompetence. Specified procedures were
required to be followed before a professor's employment could be terminated. After investigation, the University's affirmative action officer
informed [*4\1] its president that allegations that the
professor had violated its policy prohibiting sexual harassment had been
substantiated. The president accepted the findings and conclusions submitted by
the affirmative action officer. The professor was given a suspension for that
violation. The president directed the professor to seek professional counseling
and warned him that the University would take immediate action if information
of additional or similar past misbehavior came to light. The professor accepted
the terms of the suspension. After the professor returned to teaching, the University was
advised that he had engaged in other incidents of sexual harassment. The
president then informed the professor that the University would seek to
terminate his employment and advised him of his entitlement to a hearing before
the University Grievance Committee for Faculty. Following a termination
hearing, the committee submitted a report with its findings, recommendations
and conclusions. The committee made several findings unfavorable to the
professor, but recommended that his employment not be terminated because the
University had knowledge of much of the information about the professor's
conduct [*42] when he was originally suspended. Under the terms of the faculty handbook, the authority to
terminate a tenured professor's employment was vested in the University's
president. The president advised the committee that he did not agree with its
process concerns and had concluded that there were more than sufficient grounds
to support the finding of serious misconduct and termination of the professor's
employment. As permitted under their agreement, the professor appealed the
decision to the University's Board of Directors. The Board of Directors
determined that the president had the authority to terminate the professor's
employment and accepted the conclusions and final decision of the president. In common pleas court, the professor asserted a breach of contract
claim against the University. He asserted that the University's termination of
his employment violated his employment contract because he was not engaged in
serious misconduct and because he did not receive the process of tenure
termination promised under the contract. On appeal from the trial court's grant
of the University's summary judgment motion, the Superior Court articulated a
limited standard of review of internal [*43] university
decisions. We determined that the deferential approach applied by the
Superior Court was not the appropriate standard of review. We concluded that the
appropriate standard of review was the traditional standard applied by the
Pennsylvania courts in determining whether summary judgment was properly
granted in a breach of contract case. We stated: From our perspective, this is a breach of contract case between
two parties, in which the issues raised are no different from those the
Pennsylvania judiciary has typically adjudicated when presented with
allegations of a contract's breach. Although one of the parties to this dispute
is an institution of higher learning, we see no need or reason to devise
special rules for restricting review. This is so because private parties,
including religious or educational institutions, may draft employment contracts
which restrict review of professional employees' qualifications to an internal
process that, if conducted in good faith, is final within the institution and
precludes or prohibits review in a court of law. * * * When a contract so
specifies, generally applicable principles of contract law will suffice to insulate
the institution's [*44] internal, private
decisions from judicial review. 777 A.2d at 428-429. Having made this determination, we turned to the issue raised by
the professor as to whether the University breached its contract of employment
when it determined that he had forfeited his tenure. The professor asserted
that there was a genuine issue as to whether his behavior rose to the level of
serious misconduct that should have been submitted to a factfinder. The
University maintained that the right to determine whether a professor was
guilty of serious misconduct remained with the chief executive officer of the
University under the employment contract. We recognized that "no two systems of tenure are alike"
and that the practices and policies of universities were widely varied. Id. 777
A.2d at 430. The rights and obligations of a tenured professor and a university
require, therefore, an examination of the actual terms of the employment
agreement at issue. We applied the well-established principles of contract law
that guide a court's interpretation of such employment agreements. The fundamental rule in interpreting the meaning of a contract is
to ascertain and give effect to the intent of the contracting [*45] parties.
The intent of the parties to a written agreement is to be regarded as being
embodied in the writing itself. The whole instrument must be taken together in
arriving at contractual intent. Courts do not assume that a contract's language
was chosen carelessly, nor do they assume that the parties were ignorant of the
meaning of the language they employed. "When a writing is clear and
unequivocal, its meaning must be determined by its contents alone." Only where a contract's language is ambiguous may extrinsic or
parol evidence be considered to determine the intent of the parties. A contract
contains an ambiguity "if it is reasonably susceptible of different
constructions and capable of being understood in more than one sense."
This question, however, is not resolved in a vacuum. Instead, "contractual
terms are ambiguous if they are subject to more than one reasonable
interpretation when applied to a particular set of facts." In the absence
of an ambiguity, the plain meaning of an agreement will be enforced. The
meaning of an unambiguous written instrument presents a question of law for
resolution by the court. 777 A.2d at 429-430 (citations omitted). We found that the language [*46] of the
provisions in the faculty handbook regarding tenure were unambiguous. The
provisions stated that a faculty member's tenure could be forfeited for reasons
of serious misconduct and professional incompetence. Under the following
provisions, the committee would make the recommendation to the University's
president, but the authority to make the final decision with regard to
termination was vested in the president. If the committee's recommendation is that the faculty member
should not be terminated and the President concurs, the case shall be closed.
If the committee's recommendation is that the faculty member be terminated and
the President disagrees with that recommendation, the case shall be closed. If
the President terminates the affected faculty member either by approval of the
committee's recommendation or by his/her own decision, following a committee
recommendation of retention, the affected faculty member may have the final
decision of the President reviewed by the Board of Directors. 777 A.2d at 432. We concluded that the determination of whether a
tenured professor's employment should be terminated for serious misconduct was
reserved to the University and its faculty. [*47] We observed that a breach of contract claim may be brought by a
tenured professor when it is asserted that the University failed to comply with
the procedures established by the parties' contractual agreement. This cause of
action is distinguishable from a tenured professor's claim that a university
that has followed the established procedures for termination has made the wrong
decision. We stated that "while [a professor] is free to assert in a court
of law that the process of forfeiture that was afforded him did not comply with
the contract's terms, he is not free to demand that a jury re-consider and
re-decide the merits of his termination." Id. 777 A.2d at 433; see also,
Baker v. Lafayette College, 516 Pa. 291, 532 A.2d 399, 403 (Pa. 1987)
("This Court has no jurisdiction to review the factual determinations of a
college's governing body unless it can be clearly demonstrated that that body
violated its own procedures."). Appellees argue that, regardless of whether the University may be
held liable nominally for breaching its contractual relationship with Dr.
Ferrer, an award of damages is unwarranted since Dr. Ferrer was unable to
establish that the breach caused [*48] him
tangible, economic harm. "In the law of contracts remedies for breach are
designed to protect either a party's expectation interest 'by attempting to put
him in as good a position as he would have been had the contract been
performed, that is, had there been no breach'; his reliance interest 'by
attempting to put him back in the position in which he would have been had the
contract not been made'; or his restitution interest 'by requiring the other
party to disgorge the benefit he has received by returning it to the party who
conferred it.'" Trosky v. Civil Serv. Comm'n, 539 Pa. 356, 652 A.2d 813,
817 (Pa. 1995) (citing Restatement (Second) of Contracts, Section 344, Comment
a). Section 344 of the Restatement (Second) of Contracts provides, in
relevant part: Judicial remedies under the rules stated in this Restatement serve
to protect one or more of the following interests of a promisee: (a) his "expectation interest," which is his interest in
having the benefit of his bargain by being put in as good a position as he
would have been in had the contract been performed[.] The official comments to Section 344 address the concept of
"expectation interest" [*49] as
follows: a. Three interests. The law of contract remedies implements the
policy in favor of allowing individuals to order their own affairs by making
legally enforceable promises. Ordinarily, when a court concludes that there has
been a breach of contract, it enforces the broken promise by protecting the
expectation that the injured party had when he made the contract. It does this
by attempting to put him in as good a position as he would have been had the
contract been performed, that is, had there been no breach. The interest
protected in this way is called the "expectation interest." It is sometimes
said to give the injured party the "benefit of the bargain." Restatement (Second ) of Contracts § 344, comment a. In
this case, Dr. Ferrer sought damages that would place him in as good a position
as he would have been had the employment agreement not been breached by the
University. "Where one party to a contract without any legal
justification, breaches the contract, the other party is entitled to recover,
unless the contract provided otherwise, whatever damages he suffered, provided
(1) they were such as would naturally and ordinarily result from the breach, or
(2) [*50] they were reasonably foreseeable and within
the contemplation of the parties at the time they made the contract, and (3)
they can be proved with reasonable certainty." Taylor v. Kaufhold, 368 Pa.
538, 84 A.2d 347, 351 (Pa. 1951) (citations and emphasis omitted). In this case, Dr. Ferrer introduced evidence regarding the damages
that he sustained as a result of the loss of the personnel, supplies, equipment
and animals that were involved in the research program when the sanctions were
imposed. Dr. Frederick Murphy testified as an expert witness regarding the
costs of rebuilding the basic components of the research program. n15 Dr.
Murphy reviewed the status of the research program as it existed in 1990 to
determine what it would take to restore certain components of the program back
into place. - - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - -
- n15 Dr. Murphy was a Doctor of Veterinary Medicine who was trained
and experienced in virology, immunology and pathology. R. 789a. He had served
with the Center for Disease Control (CDC), where he was one of four people who
discovered the Ebola virus. He became director of its viral division, with
responsibility for a budget of $ 20 million per year. During that time, a
research program involving twenty-four people was developed to study HTLV-I and
HIV. He was subsequently promoted to Director of the National Center for
Infectious Diseases, overseeing a budget of $ 150 million per year and 2,000
people. Dr. Murphy had spent the seven years prior to trial as a professor at
the University of California, five of which he served as dean. R. 788a-793a. - - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - - [*51] Dr. Murphy testified that, in 1990, Dr. Ferrer's program had been
running for twenty years and had become "the world's premiere laboratory
dealing with bovine leukemia virus." R. 808a. He explained that the first
human leukemia virus was discovered in the United States and Japan in 1980, and
that the human leukemia virus turned out to be a very close relative of the
bovine leukemia virus. Researchers studying the human leukemia virus began to
track what the researchers who studied the animal leukemia virus had done. This
put Dr. Ferrer's laboratory "into the front row in regard to working with
the first human leukemia virus, the first human cancer virus, HTLV-I." As
a result, by 1990, Dr. Ferrer's program had shifted to try to take advantage of
what was known about the bovine leukemia virus to learn what one needed to know
about the human virus. R. 809a. The program had the herd of cattle that had been specially
selected because the animals all carried "a high load of the bovine
virus." Simultaneously, the original work to characterize the bovine virus
had been done in Dr. Ferrer's laboratory. The group that he assembled then
began to work on the human leukemia virus. Dr. Murphy [*52] described
the program as "a world class laboratory, extremely productive." R.
810a. Dr. Murphy identified the costs for reestablishing the research
program and provided a chart that set forth a budgetary itemization of those
costs. Dr. Murphy detailed the nature and extent of the costs, analyzing each
component of the salaries and fringe benefits of research personnel, laboratory
equipment, supplies, and the purchase and maintenance of the animals. R.
814a-821a. Dr. Murphy testified that, based upon this itemization of laboratory
related expenses, personnel costs, and expenditures related to animals, it
would cost $ 2.9 million to begin to rebuild Dr. Ferrer's research program. "The duty of assessing damages is within the province of the
jury and should not be interfered with by the court, unless it clearly appears
that the amount awarded resulted from caprice, prejudice, partiality,
corruption or some other improper influence." Tonik v. Apex Garages, Inc.,
442 Pa. 373, 275 A.2d 296, 299 (Pa. 1971) (citation omitted). "In
reviewing the award of damages, the appellate courts should give deference to
the decisions of the trier of fact who is usually in a superior position [*53] to
appraise and weigh the evidence." Delahanty v. First Pennsylvania Bank,
318 Pa. Super. 90, 464 A.2d 1243, 1257 (Pa. Super. 1983). The trial court refused to disturb the jury's award of damages in
this case, stating that the jury reasonably concluded, based on the amount of
time and effort Dr. Ferrer contributed to develop his research program, as well
as the money necessary to begin rebuilding the program, that $ 5 million was
the amount necessary to make Dr. Ferrer's research program "whole"
again. The jury's award of damages in the amount of five million dollars ($
5,000,000) is neither plainly excessive or exorbitant. Trial court slip op. at 7. On this record, we have little difficulty accepting that the
contractual breach discerned by the jury caused Dr. Ferrer to sustain
substantial lost opportunity. This was largely conceded by Appellees in the
Superior Court, where they accepted that "under plaintiff's theory, [Dr.
Ferrer] may have lost the opportunity or 'expectation' of continued research
because his laboratory was no longer viable...." In our view, the more
difficult questions are whether Dr. Ferrer was able to prove the amount of his loss
with [*54] sufficient definiteness to meet the
requirements of the law, and, correspondingly, whether the jury's verdict
reflects a permissible damages assessment. Appellees, however, expressly
distinguish the legal theory under which they have proceeded and on which they
prevailed in the Superior Court (asserted absence of loss causation) from a
claim that the damages were impermissibly speculative. See, e.g., Brief for
Appellees at 11 n.7 ("It is important not to confuse this element [of causation]
with the issue of the certainty with which the amount of damages must be
proven." (emphasis in original)). While this distinction may be a tenuous
one given the interrelationship between causation and damages, as challengers
to a duly rendered verdict, Appellees bore the burden of framing the issues for
appellate review. We note, however, that the Appellees presented a separate and
specific claim in the trial court and Superior Court that the damage award of $
5,000,000 was arbitrary, excessive, and not supported by the evidence. The
Appellees' argument is predicated on its assertion that the testimony of Dr.
Ferrer's expert witness effectively established an outside boundary of $ [*55] 2,900,000
for the value of the loss. n16 On review of the record, we find merit to this
claim and, accordingly, award the Appellees' request for remittitur. The
verdict will be reduced to $ 2,900,000, and we will remand this matter to the
common pleas court for recalculation of prejudgment interest as warranted on
the judgment as so modified. - - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - -
- n16 In their Superior Court brief, Appellees did also indicate
that "the $ 2.9 million amount was open to substantial question",
however, other than by way of citation to the reproduced record, this
contention was not further developed in the brief as such. Rather, the
argumentation directed to excessiveness proceeded on the assumption that the
evidence was sufficient to support a 2.9 million dollar award. In these circumstances,
we consider Appellees' argument preserved only to the latter point. Accord
Madison Constr. Co. v. Harleysville Ins. Co., 557 Pa. 595, 735 A.2d 100, 109
n.8 (Pa. 1999) ("So minimal an argument on so important an issue does not
warrant further review."). - - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - - [*56] We must next address the issue of whether the Superior Court erred
in finding that the trial court's instructions to the jury were inadequate. The
court concluded that it would have awarded a new trial to the Appellees because
the trial court's jury instructions regarding damages were improper. Dr. Ferrer
asserts that the instructions proposed by the Appellees were not supported by
citation to any legal authority and requested the trial court to provide the
jury with one-sided statements of fact and misstatements of the law. He
contends that the trial court's charge was consistent with the standard
Pennsylvania Jury Instructions (Civil). When examining jury instructions, we must determine whether the
trial court committed a clear abuse of discretion or error of law controlling
the outcome of the case. Stewart v. Motts, 539 Pa. 596, 654 A.2d 535 (Pa.
1995). It is only when "the charge as a whole is inadequate or not clear or
has a tendency to mislead or confuse rather than clarify a material issue"
that error in a charge will be found to be a sufficient basis for the award of
a new trial. Id. 654 A.2d at 540. We explained that [a] charge will be found adequate unless [*57] ''the
issues are not made clear to the jury or the jury was palpably misled by what
the trial judge said or unless there is an omission in the charge which amounts
to fundamental error." Voitasefski v. Pittsburgh Rys. Co., 363 Pa. 220,
226, 69 A.2d 370, 373 (1949)[.] A reviewing court will not grant a new trial on
the ground of inadequacy of the charge unless there is a prejudicial omission
of something basic or fundamental. Sweeny v. Bonafiglia, 403 Pa. 217, 221, 169
A.2d 292, 293 (1961); Giorgianni v. DiSanzo, 392 Pa. 350, 356, 140 A.2d 802,
805 (1985). In reviewing a trial court's charge to the jury, we must not take
the challenged words or passage out of context of the whole of the charge, but
must look to the charge in its entirety. McCay v. Philadelphia Electric
Company, 447 Pa. 490, 499, 291 A.2d 759, 763 (1972). Id. Upon review of the trial court's instructions to the jury in this
case, and the Appellees' requested jury instructions, we conclude that the
Superior Court erred in finding that the jury instructions were insufficient
and would warrant a new trial. Viewed in its entirety, the trial court's [*58] charge to
the jury adequately explained to the jury the traditional principles of
contract law governing a claim for breach of an employment agreement, the
nature and measure of the damages that are recoverable, the applicable burdens
of proof to establish a breach of contract and for damages, the considerations
in assessing the testimony of witnesses, including expert witnesses, the qualifications
of experts and the consideration of expert testimony based upon hypothetical
questions. R. 1327a-1350a. There was no fundamental omission or error in the
trial court's instructions to the jury that would require a new trial. We find that the trial court properly rejected the Appellees'
requested points for charge because they were either already covered by the
instructions that were given to the jury or were argumentative. R. 1952a,1960a.
The purpose of the court's charge is to provide guidance to the jury on the
relevant legal issues arising from the claims before the jury. The instructions
to the jury are not intended to supplement the arguments of the opposing
parties. This is the function of the attorneys who represent the parties, not
the court. We note that the Appellees did not [*59] claim that
the trial court's instructions were not in accordance with the well-established
principles of law governing a claim for breach of contract, including the
proper measure of damages. Instead, the Appellees argued that the jury was not
adequately apprised of the findings necessary in order to award damages and the
essential elements necessary to calculate the award. We find, however, that the
Appellees' requested instructions regarding damages were unsupported by
authority and contrary to legal precedent. As part of its defense, the Appellees sought to persuade the jury
that, even if a breach of Dr. Ferrer's employment contract had been
established, Dr. Ferrer did not suffer any damages as a result of the
dismantling of his research program. The Appellees requested that the jury be
instructed that Dr. Ferrer was entitled to damages for breach of contract only
if he proved by a preponderance of the evidence that he lost personal income or
his own personal property, and that to the extent that damages were recoverable
for expenses to cover the hiring of personnel and the purchase and maintenance
of animals and equipment, that only the amount of money that was necessary to
allow [*60] the plaintiff to re-establish his program was
to be awarded. n17 The Superior Court found that the trial court erred in
refusing to give such instructions. We disagree. - - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - -
- n17 The Appellees sought to persuade the jury that Dr. Ferrer had
not sustained the damages that he claimed because his personal funds were not
used to finance the research program. This argument was rejected by the jury.
The jury was free to reject the Appellees' argument as the evidence established
that the monies obtained to finance the research program were generated by Dr.
Ferrer's efforts. Dr. Ferrer expended his time and energy to develop research
proposals to generate the funds necessary to support the program, including his
own salary. The research emanated from his scientific training and knowledge,
which was continually developing based upon his ongoing efforts. To accept the
Appellees' argument, the jury would have had to disregard the substantial
evidence of Dr. Ferrer's personal contribution of his talents and energies that
established the program. The jury chose not to do so. - - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - - [*61] The trial court did not err in refusing to give the requested
instructions. The evidence introduced at trial demonstrated that Dr. Ferrer's
research program was an established program, not a fledgling research project.
The proposed instructions would have improperly limited the nature and scope of
damages that the law recognizes for breach of contract claims. The jury was
permitted to weigh the evidence regarding damages to determine what award was
necessary to restore Dr. Ferrer to the position that he would have been in had
the University complied with its obligations under the employment agreement. The Appellees also requested numerous jury instructions that would
have informed the jury that it could not find that the imposition of sanctions
by Dean Andrews was a breach of Dr. Ferrer's employment contract. n18 Such
instructions would have been improper as the evidence was sufficient to submit
to the jury the issues of whether the Procedures were part of Dr. Ferrer's
employment contract with the University, whether there was a breach of the
employment contract as a result of the sanctions, and whether he was harmed by
a breach of the agreement. The Appellees were entitled to, and [*62] did,
present evidence as a defense that they believed there was unwritten authority
for a dean to impose sanctions when a formal investigative committee has found
that a tenured professor was not guilty of misconduct in research. n19 They
were not entitled, however, to jury instructions that would have misled the
jury into believing that imposition of the sanctions could not constitute a
breach of Dr. Ferrer's employment agreement. n20 We conclude, therefore, that
the Superior Court erred in finding that a new trial should have been awarded
to the Appellees if their motion for judgment n.o.v. not been granted. - - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - -
- n18 For example, the Appellees requested instructions that
"the mere fact that sanctions were imposed is not evidence of a breach of
contract. Plaintiff must prove to you that, under all of the circumstances, the
defendants imposed sanctions that had no basis whatsoever and that were imposed
for entirely irrational and illogical purposes, and were done in bad
faith." The Appellees cited no authority for this proposition or for any
of the other requested points for charge. n19 The jury verdict form reflects that the Appellees' defense of
inherent unwritten authority of a dean to impose such sanctions was rejected
outright by the jury. [*63] n20 The Appellees' proposed instructions on causation also would
have required the trial court to misstate the nature of Dr. Ferrer's claim and
the applicable law. Dr. Ferrer was seeking to recover damages for the
interruption in his ability to perform the research to which he had devoted his
professional career. As detailed above, he presented evidence of the cost of
rebuilding his research program as well as the loss occasioned by the
Appellees' interference with his ability to perform his research. - - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - - Accordingly, the order of the Superior Court is reversed. The jury
verdict in favor of Dr. Ferrer is reinstated, the award of damages is reduced
to $ 2,900,000 plus prejudgment interest, and the matter is remanded to the
common pleas court for recalculation of the amount of prejudgment interest.
This Order is without prejudice to any separate pending appeal concerning the
matter of prejudgment interest. Mr. Justice Nigro did not participate in the consideration or
decision of this case. Former Chief Justice Flaherty did not participate in the decision
of this case. Dissenting opinions of Mr. [*64] Justice
Cappy and Madame Justice Newman to follow. DISSENTBY:
CAPPY DISSENT: DISSENTING OPINION MR. JUSTICE CAPPY * - - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - -
- * The author of the Dissenting Opinion is now Mr. Chief Justice
Cappy. - - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - - In my view, the majority opinion effects a dramatic and
ill-advised change in Pennsylvania's law of contracts relating to damages.
Because it is a change that I cannot accept, I must respectfully dissent. I begin with my understanding of Appellant's case. Appellant's
sole theory of recovery sounded in contract, and focused on the nature of the
sanctions that Appellees (collectively, "the Trustees") imposed upon
him. n1 Paragraph 64 in Appellant's complaint, which was the only allegation
that proceeded to trial, stated: (Complaint at P64). - - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - -
- n1 While Appellant's complaint set forth claims for intentional
interference with business relations, breach of contract, intentional
infliction of emotional distress, defamation, and conspiracy, except for
paragraph 64 in his breach of contract count, all of Appellant's claims were
either voluntarily withdrawn or dismissed as untimely. - - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - - [*65] 64. Even if [the Trustees] had the authority to impose some
sanction against [Appellant], the sanctions imposed were so excessive and
arbitrary when measured against the conduct and previous record of [Appellant]
that said defendants breached their duties as set forth in the Procedures. n2 - - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - -
- n2 I agree with the majority that Appellant proved that the
Trustees breached this promise. - - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - - According to Appellant, the sanctions that the Trustees imposed
upon him caused him to lose the ability to perform scientific research, n3 and
the damages he requested were to protect his expectation interest under Section
344 of the Restatement (Second) of Contracts. The only evidence which Appellant
submitted on damages was expert evidence to show that the particular research
program in which he was involved as a University of Pennsylvania professor
would cost $ 2.9 million to re-establish. The jury awarded Appellant the $ 2.9
million and more. This award of the research program to Appellant is what the
majority upholds, [*66] although it reduces
the amount of that reward to the $ 2.9 million figure that Appellant's expert
opined would be necessary if the program were to be restored. - - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - -
- n3 In Appellant's own words: "Although it was undisputed that
[Appellant] did not lose salary or fringe benefits as a result of [the
Trustees'] unauthorized and improper sanctions, [he] lost something far more
precious and valuable to him: the ability to perform important, if not vital
scientific research...." (Appellant's Brief at 30) (emphasis in original). - - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - - The expectation interest is indeed protected in Pennsylvania. Trosky
v. Civil Serv. Comm'n, 539 Pa. 356, 652 A.2d 813, 817 (Pa. 1995) (citing
Restatement (Second) of Contracts § 344 cmt. a). The premise of the
expectation interest as it currently stands in Pennsylvania jurisprudence is
clear. It endeavors to put a promisee in as good a position as he would have
been in, had he received what he was promised. Id. The Trustees assert, inter alia, that the Superior [*67] Court's
decision to enter judgment in their favor must be upheld because Appellant did
not show that he himself suffered any financial loss as a result of the breach
of contract. That is to say, Appellant's proof on damages, did not, as the
expectation interest requires, show the position he would have been in
financially had the Trustees performed their obligations. I agree. Simply
stated, Appellant's proof on damages is inconsistent with his expectation
interest because Appellant's financial position would not have included the
research program's value and Appellant would not have been $ 2.9 million richer,
even if the Trustees had refrained from imposing excessive and arbitrary
sanctions upon him. To me, it is self-evident that the law of contracts protects the
economic expectations of parties to a contract and redresses the economic
injuries that a contracting party suffers as a consequence of the contract's
breach. See John E. Murray, Jr., Grismore on Contracts, § 195 (Rev.
ed. 1965) ("Inasmuch as the promisee in a contract is primarily entitled
to have performance, if he cannot get it, the law endeavors to put him, as
nearly as it can, in as good a position financially [*68] as he
would have been in, had he received what he was promised.") (emphasis
added). Therefore, when I assess Appellant's theory of recovery and the
propriety of the jury's award under the expectation interest, I ask a
straightforward question: if Appellant had received what the parties' contract
promised him, would his economic position have included the research program or
its worth? I can only answer this question in the negative. My reasons are
two-fold. First, the parties' contract, as Appellant set it forth in paragraph
64 of his complaint, did not include a promise that the research program would
be his. Second, the undisputed facts of record establish that Appellant had no
ownership or other legally-recognized interest in the research program, its
underlying funding or in its components, nor did he expect to be given or gain
such an interest under the parties' agreement. n4 In other words, Appellant did
not lose the research program or its value due to the Trustees' breach, and
would not have acquired it, even if the Trustees had fulfilled their
contractual obligation. Thus, Appellant's award does not place him in the
financial position he would have been in had the Trustees [*69] performed.
Rather, by giving him the monetary equivalent of the research program, the
award put him in a much better financial situation. - - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - -
- n4 Appellant's expert, Frederick Murphy M.D., confirmed that the
research program did not belong to Appellant, and never would have belonged to
him. Dr. Murphy testified that the grant money that purchased all of the items
that constituted the research program in which Appellant worked--the animals,
supplies, personnel and equipment--was given to the University of Pennsylvania
and placed into a segregated university account. (N.T. 12/4/98 at 158-160). In
this context, therefore, the majority's repeated references to "Dr.
Ferrer's research program; "his research staff"; and "his animal
colonies" are incorrect and misleading. See, e.g., Majority Opinion at 20,
22, 23, 30. - - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - - In my view, therefore, Appellant's award runs contrary to the
expectation interest as the law of contracts defines it. Accordingly, Appellant
failed to satisfy his burden on damages, an essential element [*70] of his
case, see Spang & Co. v. U.S. Steel Corp., 519 Pa. 14, 545 A.2d 861, 866
(Pa. 1988), and a judgment in the Trustees' favor is warranted, notwithstanding
the jury's verdict. n5 - - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - -
- n5 I do not disagree with the majority opinion's discussion of an
appellate court's standard of review when confronted with a motion for
j.n.o.v., as far as it goes. (Majority Opinion at 5). I would add, however,
that judgment n.o.v. may be entered if the movant is entitled to a judgment as
a matter of law. Boettger v. Miklich, 534 Pa. 581, 633 A.2d 1146, 1148 n.2 (Pa.
1993). When deciding a question of law, this court's review is de novo and its
scope of review is plenary. Buffalo Township v. Jones, 813 A.2d 659, 664 n.4
(Pa. 2002). - - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - - Recalling Appellant's description of what he lost as a result of
the Trustees' breach, i.e., his ability to conduct research, Appellant should
have presented evidence of the value of what would have accrued to his economic
well-being because he had [*71] the opportunity to
work in the research program. For example, had Appellant offered expert
testimony to the effect that by virtue of his continuing research, he could
have secured a higher salary at another institution or some other personal
financial gain, he might have established the damages element of his case. If
no such proof were available, or if compensatory damages were inadequate,
Appellant could have pursued injunctive relief, to enjoin the Trustees from
imposing the sanctions. See Rogoff v. Buncher Co., 395 Pa. 477, 151 A.2d 83, 86
(Pa. 1959). I submit that the majority's decision to uphold the jury's award
to Appellant, which disregards the traditional underpinnings of the expectation
interest, is unprecedented, and will alter substantially the rights and
liabilities which flow between plaintiffs and defendants in Pennsylvania in
breach of contract actions. In my view, the majority opinion will work an
injustice in many cases. Accordingly, I dissent, and would affirm the Superior
Court's memorandum opinion and order, reversing the trial court, and concluding
that judgment should be entered in the Trustees' favor. n6 - - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - -
- n6 I read pages 9 through 11 of the Superior Court's memorandum
opinion as voicing the conclusion that the jury's award cannot stand because it
did not fall within Appellant's expectation interest insofar as Appellant had
no economic interest in the research program's funding or that which it bought. - - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - - [*72] |