## Facts

- Cynthia L. McNaughton, an art teacher in her 50s, entered South Carolina’s Program of Alternative Certification for Educators (PACE), which required completion of an induction teaching year to obtain certification.
- Charleston Charter School for Math and Science hired McNaughton in August 2010 to teach art and yearbook for the 2010–2011 school year, knowing she was in PACE and needed the induction year.
- McNaughton signed a contract for full-time employment for the school year; the agreement included a clause stating the job was contingent on funding and enrollment.
- McNaughton received positive feedback and was not disciplined.
- On December 1, 2010, the principal terminated McNaughton mid-year, stating the school needed to use funds allocated to her salary to hire a math teacher after poor student math test performance.
- Evidence supported a finding that McNaughton’s position remained funded at the time of termination.
- The termination prevented McNaughton from completing the PACE induction year, and she could not obtain another qualifying position, causing economic harm.
- McNaughton sued for breach of contract/wrongful termination seeking actual and special damages; the jury awarded $20,623 in actual damages and $74,112 in special damages.
- The trial court also awarded attorney’s fees against the school under S.C. Code Ann. § 15-77-300 for lack of substantial justification; the appeal was certified directly to the South Carolina Supreme Court.

## Issues

1. Whether the trial court erred in denying directed verdict and JNOV on the breach-of-contract claim in light of the contract’s “contingent on funding and enrollment” clause.
2. Whether the jury could award special (consequential) damages for lost future earnings tied to McNaughton’s inability to complete PACE and become certified.
3. Whether attorney’s fees were properly awarded under S.C. Code Ann. § 15-77-300 by treating the charter school as covered by the statute and finding its position lacked substantial justification.

## Decision

- The Supreme Court of South Carolina affirmed the judgment in full.
- Substantial evidence supported the jury’s finding that the contingency clause was not triggered and that terminating McNaughton constituted a breach because her position remained funded.
- The special-damages award for lost future earnings was upheld as sufficiently supported and foreseeable given the school’s knowledge of PACE and McNaughton’s need to complete the induction year.
- Attorney’s fees were affirmed because the charter school fell within § 15-77-300’s scope and the school’s litigation position lacked substantial justification.

## Legal Principles

- A directed verdict or JNOV is improper when the record contains evidence from which reasonable jurors could find for the nonmoving party on breach and damages.
- A contract contingency tied to funding/enrollment does not excuse termination absent evidence the contingency was actually met; discretionary reallocation of funds may still constitute breach.
- Special (consequential) damages in contract are recoverable when they are foreseeable and within the parties’ contemplation at contracting; proof must permit a reasonable quantification by the factfinder.
- When an employer knows a teacher’s continued employment is necessary to complete a certification program, loss of certification-related earning capacity can be foreseeable consequential harm from a mid-year breach.
- Attorney’s fees may be awarded under S.C. Code Ann. § 15-77-300 against covered public entities, including charter schools treated as part of the public education system, when they act without substantial justification.

## Conclusion

The court upheld a jury verdict that a charter school breached a mid-year teaching contract despite a funding/enrollment contingency clause, permitted foreseeable consequential damages for lost certification-related earnings based on the school’s knowledge of the teacher’s PACE requirements, and affirmed attorney’s fees under § 15-77-300 because the school was subject to the statute and lacked substantial justification.


McNaughton v. Charleston Charter Sch. for Math & Sci., Inc., 411 S.C. 249, 768 S.E.2d 389 (S.C. 2015)