Opinion
NOT TO BE PUBLISHED
Appeal from a judgment of the Superior Court of Orange County, Charles Margines, Judge. Super. Ct. No. 04CC10212
The Law Office of John Derrick and John Derrick for Plaintiffs and Appellants.
Collins & Bellenghi, Michael J. Collins and Julian B. Bellenghi for Defendant and Respondent.
OPINION
FYBEL, J.
Introduction
In January 2000, while employed by Vanguard University of Southern California (Vanguard), Susan R. Rebar entered an agreement with Vanguard regarding tuition remission for her son, Ryan Rebar. (We use the parties’ first names for ease of reference, and intend no disrespect.) At the time Susan and Vanguard entered into this agreement, Vanguard was aware that Ryan was almost 24 years old, the age at which Vanguard’s tuition remission policy typically ended. Vanguard honored the tuition remission agreement vis-à-vis Ryan until August 2002, when Vanguard denied the tuition remission benefit because Ryan was 26 years old and married. Susan and Ryan sued Vanguard to enforce the tuition remission benefit. The trial court granted summary judgment in favor of Vanguard, and Susan and Ryan appealed. Given the triable issues of material fact, as detailed post, the trial court erred in granting summary judgment in this case. Therefore, we reverse.
Statement of Facts
Susan began working for Vanguard as a student account specialist in August 1999. Vanguard had in place an employee handbook which reads, in relevant part: “Any regular [Vanguard] staff employee and his/her immediate family (spouse and dependent children*) may be granted [Vanguard] tuition remission at a rate of fifty percent after an equivalent of six months of full-time employment here, seventy-five percent after an equivalent of one year of full-time [Vanguard] employment, and 100% after an equivalent of two years of full-time [Vanguard] employment. *For further information see current IRS Dependent Definition, available at the Business Office.” The tuition remission policy specifies, “[t]he University reserves the right to rescind these benefits at any time.”
In January 2000, Susan spoke with Tony Choi, Vanguard’s acting director of budget and finance, about tuition remission benefits for her son, Ryan. During that conversation, Susan informed Choi: (1) Ryan was interested in attending Vanguard; (2) because Susan had not been employed by Vanguard for two years, Ryan would not be eligible for 100 percent tuition remission; and (3) Ryan would soon turn 24 years old, and would be ineligible for the tuition remission.
On January 25, 2000, Choi wrote a letter to Susan, stating: “I just want to formalize our conversation regarding to the tuition remission benefit that Vanguard University of Southern California has agreed to extend to Ryan Rebar. We are appreciative of the commitment that you have made to the University and as a part of this agreement, your continued commitment to stay on as staff for at least two more years. In the event that our paths separate and it is necessary for you to leave Vanguard University of Southern California before the two-year period, you will be responsible to repay the tuition within one year from the date you leave the University. [¶] . . . [¶] . . . Please indicate that you understand and agree to the above conditions by putting your signature on the line at the bottom of this page as acceptance of this arrangement.” As requested, Susan countersigned Choi’s letter.
Ryan registered as a student at Vanguard for the spring 2000 term, and turned 24 in April 2000. Between February 2000 and April 2002, Ryan received tuition remission benefits totaling $26,623. Ryan married in June 2002, and filed a joint federal tax return with his wife in 2001 and 2002.
The parties do not explain how Ryan and his wife could have filed a joint tax return before they married, but this has no effect on our opinion and analysis.
In August 2002, Susan submitted a tuition remission application for Ryan for the fall 2002 term. Vanguard denied this application because Ryan was over age 24 and no longer Susan’s dependent. As Vanguard’s human resources director explained, “[i]n January, 2000 you had less than six months service with Vanguard and were not yet eligible for tuition remission. Tony [Choi] granted an exception to the tuition remission policy to accelerate your tuition remission benefit for your dependent child, Ryan Rebar, to 100% in exchange for your commitment to continue employment at Vanguard for at least two years. [¶] Ryan enrolled in the School of Professional Studies in the Spring of 2000. He received 100% tuition remission through the summer session of 2002. During Fall 2002 registration it was discovered that Ryan was 26 years old and married. As a result of this finding, he was no longer eligible for tuition remission or reduction as indicated in IRS Publication 501 and 520.”
Procedural History
Susan and Ryan sued Vanguard for breach of a written contract. They alleged the January 25, 2000 letter was an agreement between Susan and Vanguard, of which Ryan was a third party beneficiary, and attached a copy of the letter to the complaint. Vanguard moved for summary judgment. The trial court’s minute order granting the motion for summary judgment reads, in relevant part: “Plaintiffs take the position that the letter of January 25, 2000, is in fact a stand-alone contract between the parties, or at least that there is a triable issue of fact as to whether it is . . . . Plaintiffs also characterize the Tuition Remission Benefit set out in the employee handbook as ‘only a passage in a Student Handbook explaining potential Benefits’ . . . . However, it is clear that the letter/contract [hereafter ‘letter’] cannot be read in a vacuum, as it makes reference to defendant’s ‘tuition remission benefit.’ Clearly, then, the letter modified the tuition remission benefit afforded to plaintiffs. The dispute herein concerns the nature of the modification. Admittedly, the letter is ambiguous; it does not explain what the benefit actually is or how long it will last. In their points and authorities, plaintiffs contend that, pursuant to the letter, they are entitled to tuition remission for Ryan Rebar until he received his degrees within a reasonable amount of time so long as his mother, plaintiff Susan Rebar, worked at defendant Vanguard University for at least two years. However, plaintiffs have not presented any evidence supporting such interpretation. In fact, their testimony and Ryan Rebar’s response to a special interrogatory offered a different, and unreasonable, interpretation – So long as Susan Rebar put in her two years on the job, Ryan Rebar would be entitled to free higher education for as long as he wanted. On the other hand, defendant submitted evidence that the letter was intended only to waive the two-year employment requirement of its tuition remission benefit. Specifically, defendant offered evidence that: A) Susan Rebar knew that her son was ineligible for a full waiver because she had not been employed at the University for the required two years and because Ryan Rebar was nearing the age of ineligibility (i.e. the age of 24); B) She did not speak to anyone at the University regarding waiving the age limit; and C) Mr. Choi, defendant’s director of budget and finance, who wrote the letter to plaintiff Susan Rebar, testified that she approached him only with regard to waiving the two-year employment requirement and that his intent in writing the letter was only that; it was not his intent to waive any other requirement for the tuition remission benefit. Significantly, in plaintiffs’ separate statement, they either did not dispute these facts or failed to present any evidence in opposition. The court finds that defendant’s interpretation of the letter is reasonable and plaintiffs’ interpretation is not. In sum, defendant Vanguard University met its burden of demonstrating that plaintiffs cannot establish that it breached the agreement in the letter because the agreement was only to waive the two-year employment requirement, and defendant complied with the agreement. Plaintiffs did not raise a triable issue of fact to show that their interpretation of the letter is reasonable based on the language in the letter and extrinsic evidence to resolve its ambiguity.”
Judgment was entered, and Susan and Ryan timely appealed.
Discussion
We review summary judgment de novo, “considering all of the evidence the parties offered in connection with the motion (except that which the court properly excluded) and the uncontradicted inferences the evidence reasonably supports.” (Merrill v. Navegar, Inc. (2001) 26 Cal.4th 465, 476.) In this case, the court declined to rule on Vanguard’s evidentiary objections, so we consider all the evidence before the court.
In performing our de novo review, we use a three-step analysis. “First, we identify the issues raised by the pleadings. Second, we determine whether the movant established entitlement to summary judgment, that is, whether the movant showed the opponent could not prevail on any theory raised by the pleadings. Third, if the movant has met its burden, we consider whether the opposition raised triable issues of fact.” (Hawkins v. Wilton (2006) 144 Cal.App.4th 936, 939-940, italics omitted.)
We must first consider what constitutes the contract between Susan and Vanguard. Susan and Ryan take the position that Choi’s January 25, 2000 letter was a stand-alone contract. We conclude the tuition remission benefit section of the employee handbook is a part of the contract between Susan and Vanguard. The January 25 letter does not constitute an integrated contract. “In considering whether a writing is integrated, the court must consider the writing itself, including whether the written agreement appears to be complete on its face; whether the agreement contains an integration clause; whether the alleged parol understanding on the subject matter at issue might naturally be made as a separate agreement; and the circumstances at the time of the writing.” (Founding Members of the Newport Beach Country Club v. Newport Beach Country Club, Inc. (2003) 109 Cal.App.4th 944, 953-954.) The January 25 letter does not contain an integration clause and does not appear complete on its face. To the contrary, the January 25 letter does not specify any of the terms of “the tuition remission benefit that Vanguard . . . has agreed to extend to Ryan Rebar.” The portions of the employee handbook addressing tuition remission are a natural part of the subject of the January 25 letter, and we therefore conclude the handbook together with the January 25 letter constitutes the agreement between the parties on this subject.
In interpreting a contract, we must give effect to the mutual intention of the parties. (Powerine Oil Co., Inc. v. Superior Court (2005) 37 Cal.4th 377, 390.) As we have repeatedly held, “California recognizes the objective theory of contracts [citation], under which ‘[i]t is the objective intent, as evidenced by the words of the contract, rather than the subjective intent of one of the parties, that controls interpretation’ [citation]. The parties’ undisclosed intent or understanding is irrelevant to contract interpretation. [Citations.]” (Founding Members of the Newport Beach Country Club v. Newport Beach Country Club, Inc., supra, 109 Cal.App.4th at p. 956.)
“The mutual intention of the parties is to be inferred, if possible, solely from the written provisions of the contract. Where contractual language is clear and explicit, it governs. [Citations.]” (Powerine Oil Co., Inc. v. Superior Court, supra, 37 Cal.4th at p. 396.) Here, the language of the contract is anything but clear and explicit. It is obvious that the January 25 letter was intended to supersede or modify the tuition remission benefit included in the employee handbook, but the extent of that modification is unclear. The January 25 letter does not specify any of the terms of the agreement between Susan and Vanguard, other than: (1) Susan agreed to work for Vanguard for at least two years following January 25, 2000; and (2) if Susan did not do so, for any reason, she would repay Ryan’s tuition benefits within one year after leaving Vanguard’s employ.
The January 25 letter stated it was intended to “formalize our conversation regarding to the tuition remission benefit that Vanguard . . . has agreed to extend to Ryan Rebar.” The only evidence of the conversation referenced in the letter was Susan’s deposition testimony, which Vanguard included in its separate statement: “I can remember that I spoke to [Choi] and told him that Ryan had an interest in coming to school and that I knew he would be 24 in April; and him starting school, it would make him ineligible with regard to his age, as well as I had not been an employee of Vanguard long enough to receive full tuition remission for him. [¶] . . . [¶] . . . I remember [Choi’s] statement to me was that he couldn’t make a decision about this, that he needed to take it to Kent [Mutschler, Vanguard’s human resources director] and Dave Alford and that he would get back to me.”
The only excerpts from Choi’s deposition testimony which are included in the appellate record do not refute Susan’s statements, and, indeed, Vanguard does not dispute Ryan’s age was disclosed to Choi, and discussed by Susan and Choi. At a minimum, the January 25 letter waived, for some period of time, the 24-year-old age restriction in the tuition remission benefit section of Vanguard’s employee handbook. Vanguard’s conduct was consistent with such an understanding on Susan’s part, since Vanguard continued to afford Ryan the 100 percent tuition remission benefit after Ryan turned 24.
There are triable issues of material fact regarding how long the tuition remission benefit would be extended to Ryan. The January 25 letter could be read as extending the benefit to Ryan: (1) in perpetuity; (2) for a reasonable time to permit him to complete a degree; (3) for the same two-year period to which Susan committed herself to work for Vanguard; or (4) for no defined period, given the language in the employee handbook reserving in Vanguard the “right to rescind these benefits at any time.” The fourth time period might not be a reasonable interpretation of the agreement’s terms, however. The tuition remission benefit in the employee handbook specifies, “[a]ny regular [Vanguard] staff employee and his/her immediate family . . . may be granted [Vanguard] tuition remission . . . .” (Italics added.) The January 25 letter certainly modified this language to provide the benefit would be granted to Ryan, and therefore might have modified Vanguard’s reservation of rights to rescind the benefit, as least with respect to Ryan.
There are also triable issues of material fact as to whether the tuition remission benefits have vested, in part. The employee handbook provides: “Tuition discounts will be vested as follows: [¶] . . . Full tuition discount will be allowed for staff, spouses and single dependent children of staff who have served the institution with ten years’ full-time equivalency or more. [¶] . . . Tuition discounts will be allowed for staff, spouses and single dependent children of full-time staff who have served the institution less than ten years and are no longer in such service with the institution: [¶] Less than three years of full-time equivalency: None [¶] Three to ten years of full-time equivalency: 10% remission per year [¶] . . . [¶] . . . Dependent children of staff will not lose these discounts when married provided they were single upon initially receiving student status at [Vanguard].” (Italics added.) The parties do not dispute the following facts: (1) Susan began working for Vanguard on August 16, 1999; and (2) Susan and Ryan submitted a tuition remission request on an unspecified date in August 2002, which was denied by Vanguard because Ryan was 26 years old and married. There is a triable issue of material fact as to whether any portion of Susan and Ryan’s tuition benefits vested. If so, there is a further triable issue of material fact as to whether the terms of the employee handbook apply so that Ryan would continue to be eligible to receive some portion of the tuition remission benefit despite marrying.
“[W]hen a party contends the language of a contract is ambiguous the test for the admissibility of extrinsic evidence to explain the meaning of the contract is not whether the contract appears to the court to need interpreting ‘but whether the offered evidence is relevant to prove a meaning to which the language of the instrument is reasonably susceptible.’ Therefore, the court must provisionally receive all credible evidence concerning the parties’ intentions to determine whether the contract language is reasonably susceptible to the interpretation urged by a party. If in light of the extrinsic evidence the language is reasonably susceptible to the interpretation urged, then the extrinsic evidence is admitted to aid in interpreting the contract. ‘If it is not, the case is over.’” (Wagner v. Columbia Pictures Industries, Inc. (2007) 146 Cal.App.4th 586, 589-590, fns. omitted.) In this case, when the trial court properly and provisionally received the extrinsic evidence offered by Vanguard in support of its motion for summary judgment, and by Susan and Ryan in opposition to the motion, it should have concluded the language of the tuition remission agreement was reasonably susceptible of the interpretations urged by both sides. Therefore, it was inappropriate for the trial court to grant summary judgment in favor of Vanguard.
We note that this is not a case in which it was illegal for Vanguard to have provided full tuition remission for Ryan after his 24th birthday or after his marriage. Generally, a taxpayer may claim a child as a dependent if the child is under 19 years of age, or if the child is under 24 years of age and is a full-time student. (26 U.S.C. § 152(c)(1)(C) & (3)(A).) Unquestionably, at the time Vanguard revoked Ryan’s tuition remission benefit, Ryan did not fall within the IRS definition of a dependent. But the IRS definition does not prevent an institution like Vanguard from extending benefits intended for dependent children to those who are not, or are no longer, within that definition.
Disposition
The judgment is reversed. Appellants shall recover their costs on appeal.
WE CONCUR: BEDSWORTH, ACTING P. J., O’LEARY, J.