Angel Medical Center, Inc. v. Abernathy

• Decision Date: 10 March 2000
• Docket Number: No. 2:98CV257-C.,2:98CV257-C.
• Citation: 159 F.Supp.2d 215
• Parties: ANGEL MEDICAL CENTER, INC., Plaintiff, v. George T. ABERNATHY, Defendant.
• Court: U.S. District Court — Western District of North Carolina

159 F.Supp.2d 215

ANGEL MEDICAL CENTER, INC., Plaintiff, v. George T. ABERNATHY, Defendant.

No. 2:98CV257-C.

United States District Court, W.D. North Carolina, Bryson City Division.

March 10, 2000.

COPYRIGHT MATERIAL OMITTED

Chester M. Jones, Jones, Key, Melvin & Patton, Franklin, NC, for Plaintiff.

Gregory E. Mierzwinski, Morgan, Padgett & Mierzwinski, Tampa, FL, for Defendant.

MEMORANDUM OF DECISION

COGBURN, United States Magistrate Judge.

THIS MATTER is before the court upon plaintiff's Motion for Summary Judgment. In accordance with 28, United States Code, Section 636(c), the parties have entered written consents to disposition of this matter by the undersigned.

I. Jurisdiction

Defendant removed this matter to this court on December 9, 1998, based upon an allegation of an amount in controversy exceeding $75,000¹ and complete diversity. Plaintiff is a corporate resident of the State of North Carolina, defendant resides in the State of Florida, and the amount in controversy is $95,374.90, which well exceeds the jurisdictional minimum. It appearing that there is complete diversity and that the amount in controversy exceeds $75,000, this court has jurisdiction over the subject matter of this action. 28 U.S.C. § 1332(a).

II. Procedural Background

Plaintiff's motion, filed November 1, 1999, is supported by a memorandum of law and extensive exhibits. Defendant also filed a motion on November 1, 1999, in which he sought to amend his answer to assert the further affirmative defense of accord and satisfaction. Anticipating that such amendment would be allowed, plaintiff briefed the issue of accord and satisfaction in its memorandum filed in support of its Motion for Summary Judgment. Defendant's deadline for filing a response to plaintiff's motion was November 18, 1999, and despite the passage of 90 days, no response in opposition has been filed. See Local Rule 7.1(B), W.D.N.C.

III. Discussion

A. Introduction

Despite the procedural default, the court has closely reviewed defendant's amended answer for any possible response contained therein. Although defendant asserts estoppel and the doctrine of accord and satisfaction as affirmative defenses, the amended answer is not verified and cannot be considered as "evidence" that would satisfy his burden under Rule 56, Federal Rules of Civil Procedure, discussed below. The court, however, will consider all admissible evidence in a light most favorable to defendant, including his deposition testimony, which was submitted by plaintiff in support of its motion.

B. Standard

On a motion for summary judgment, the moving party has the burden of production to show that there are no genuine issues for trial. Upon the moving party's meeting that burden, the nonmoving party has the burden of persuasion to establish that there is a genuine issue for trial.

When the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts. In the language of the Rule, the nonmoving party must come forward with "specific facts showing that there is a genuine issue for trial." Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party [sic], there is no "genuine issue for trial."

Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (citations omitted; emphasis in the original) (quoting Fed.R.Civ.P. 56). There must be more than just a factual dispute; the fact in question must be material and readily identifiable by the substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). By reviewing substantive law, the court may determine what matters constitute material facts. Id. "Only disputes over facts that might affect the outcome of the suit under governing law will properly preclude the entry of summary judgment." Id. at 248, 106 S.Ct. 2505. A dispute about a material fact is "genuine" only if the evidence is such that "a reasonable jury could return a verdict for the nonmoving party." Id.

[T]he court is obliged to credit the factual asseverations contained in the material before it which favor the party resisting summary judgment and to draw inferences favorable to that party if the inferences are reasonable (however improbable they may seem).

Cole v. Cole, 633 F.2d 1083, 1092 (4th Cir.1980). Affidavits filed in support of plaintiff's Motion for Summary Judgment are to be used to determine whether issues of fact exist, not to decide the issues themselves. United States ex rel. Jones v. Rundle, 453 F.2d 147 (3d Cir.1971). When resolution of issues of fact depends upon a determination of credibility, summary judgment is improper. Davis v. Zahradnick, 600 F.2d 458 (4th Cir.1979).

C. Defendant's Affirmative Defenses

1. Introduction

Review of substantive case law reveals that a defendant cannot rest upon mere allegations in an answer, but has an affirmative obligation to establish his affirmative defenses with affirmative proof. Aldridge Motors v. Alexander, 217 N.C. 750, 9 S.E.2d 469 (1940). His burden in responding to plaintiff's motion is to satisfactorily show that estoppel and/or accord and satisfaction would stand in bar to plaintiff's claim. Defendant has not made such a showing, and plaintiff is entitled to the relief it seeks.

2. Nature of the Dispute

In substance, plaintiff seeks to recover certain subsidies it provided to defendant under the Hospital and Physician Agreement. Plaintiff has made a prima facie showing that it had a contract with the defendant, it made certain payments, and defendant breached the agreement by moving his practice to Florida. For damages, plaintiff seeks repayment of the subsidies in accordance with the terms of the written agreement. The terms of that agreement are not in dispute, and review of all the evidence submitted indicates that defendant breached the agreement.

In pertinent part, the agreement provided that the plaintiff hospital would pay defendant doctor a stipend or subsidy during the start-up period of defendant's cardiology practice in the community served by plaintiff hospital. Those supplemental payments were in the nature of advances that were repayable if defendant failed to practice in the community for three years. Upon completion of the three-year term, such indebtedness would be forgiven.

3. Estoppel

In support of his allegation that plaintiff should be estopped from asserting any breach, defendant contends that when other doctors committed to building and leasing a large office building on plaintiff's medical campus, they demanded that defendant join them in that venture as a tenant and conditioned future referrals on his willingness to do so. Defendant states that he found such terms to be undesirable and met with some of the doctors and plaintiff's Chief Executive Officer in an attempt to resolve the issue. It is defendant's contention that plaintiff acquiesced to the demands of the other doctors and used its leverage under the agreement to force defendant to become a tenant. For such alleged coercion, defendant maintains that plaintiff should be estopped from asserting the breach.

To invoke the doctrine of equitable estoppel under North Carolina law, the party seeking the equitable relief must prove the following elements:

(1) The conduct to be estopped must amount to false representation or concealment of material fact or at least which is reasonably calculated to convey the impression that the facts are other than and inconsistent with those which the party afterwards attempted to assert;

(2) Intention or expectation on the party being estopped that such conduct shall be acted upon by the other party or conduct which at least is calculated to induce a reasonably prudent person to believe such conduct was intended or expected to be relied and acted upon[;]

(3) Knowledge, actual or constructive, of the real facts by the party being estopped;

(4) Lack of knowledge of the truth as to the facts in question by the party claiming estoppel;

(5) Reliance on the part of the party claiming estoppel upon the conduct of the party being sought to be estopped;

(6) Action based thereon of such a character as to change his position prejudicially.

State Farm Mut. Auto. Ins. Co. v. Atlantic Indemnity Co., 122 N.C.App. 67, 75, 468 S.E.2d 570 (1996) (citations omitted). Equitable estoppel is not available to a party who "was put on inquiry as to the truth and had available the means for ascertaining it." Hawkins v. M & J Finance Corp., 238 N.C. 174, 179, 77 S.E.2d 669 (1953).

Defendant cannot establish a defense of estoppel in this matter. The only material allegations are that defendant had an agreement with plaintiff to practice in the community for a number of years, other private doctors had an agreement with plaintiff concerning a lease to which defendant was not privy, those doctors allegedly wanted defendant to participate in their lease with plaintiff in exchange for future referrals, plaintiff would not pressure those doctors to relent, and defendant left town with his obligation of repayment allegedly forgiven. Nowhere is it alleged in the first affirmative defense or shown in the record that plaintiff made a false representation or concealed a material fact-essentials when asserting estoppel. In the world of business, in which the medical profession appears deeply immersed, there is no obligation that one business level the playing field or, for that matter, forego an advantage. Estoppel has no application to this situation.

4. Accord and Satisfaction

It is defendant's contention in his amended answer, as well as in his deposition, that plaintiff's Chief Executive Officer told him that if he did not want to join the other doctors as a tenant, he could leave town prior to the expiration of the three-year period and his repayment obligation would be...