Balder v. Lavin
| Decision Date | 13 June 2018 |
| Docket Number | CIVIL ACTION NO. 2:16-CV-130-KS-MTP |
| Parties | DONALD A. BALDER PLAINTIFF v. THOMAS E. LAVIN; SURGICAL SPECIALISTS OF LOUISIANA, LLC; SURGICAL SPECIALISTS OF MISSISSIPPI, LLC; MICHAEL A. THOMAS, CLARK WARDEN; JAMES G. REDMANN; and JOHN DOES 1-10 DEFENDANTS |
| Court | U.S. District Court — Southern District of Mississippi |
Plaintiff filed the current suit on August 30, 2016, against Defendants SSL, Lavin, Surgical Specialists of Mississippi, LLC ("SSM"), Michael Thomas, and Clark Warden, asserting numerous causes of actions. SSL, Lavin, and SSM are the only defendant who remain in the case. SSL is a limited liability company ("LLC"), whose members include Lavin. SSM is an LLC whose sole owning member is SSL.
Plaintiff and Lavin met in 2011, and Plaintiff eventually expressed an interest in opening a bariatric surgery practice on the Mississippi Gulf Coast. Plaintiff came to an agreement with Lavin, whereby SSL would create SSM to employ Plaintiff and his staff and SSL would provide certain managerial services for SSM. For Plaintiff's first year of employment, it was agreed that he would be paid a fixed salary. After this year was up, Plaintiff was presented with different compensation model options, but ultimately decided to enter into the same partner compensation model that other physicians in the practice used.
This employment arrangement began to break down in 2015, and in early 2016, Plaintiff's employment with SSM and his affiliation with SSL was terminated. The claims in this suit stem from that break down and termination.
A federal court sitting in diversity is bound to follow the substantive law of the forum state, including that state's conflict of law rules. Klaxon Co. v. Stentor Elec. Mfg. Co, 313 U.S. 487, 496, 313 S. Ct. 1020, 1021, 85 L. Ed. 1477 (1941); see also Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 114 A.L.R. 1487 (1938). In Mississippi, a choice of law analysis is only appropriate where there is a true conflict between the laws of two or more states having an interest in the litigation. Zurich Am. Ins. Co. v. Goodwin, 920 So.2d 427, 487 (Miss. 2006) (citing Boardman v. United Servs. Auto. Ass'n, 470 So.2d 1024, 1038 (Miss. 1985)). Once a true conflict is found to exist, Mississippi then employs a three-step choice of law analysis: (1) determine whether the conflicting laws are substantive or procedural; (2) classify the area of substantive law,whether tort, property, or contract; and (3) look at the relevant section of the Restatement (Second) of Conflict of Laws. Id. at 488.
Parties assume without argument that there is a conflict of laws issue in this case. Defendants argue in their motions that Louisiana law should be applied, and Plaintiff argues in his motion that the laws of Mississippi apply. However, both sides concede in their responses to the other side's motion that an analysis under either state's law would reach the same result, which would mean there is no true conflict of law. Mississippi's choice of law rules, then, bind this Court to apply the substantive law of Mississippi. The Court will, however, apply Louisiana law to those specific instances where the Complaint [1] invokes Louisiana statutory law as the basis of Plaintiff's claim.1 For claims where parties have cited only one state's law, the Court will accept that state's law as controlling for that claim for purposes of these motions.
Federal Rule of Civil Procedure 56 provides that "[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). "Where the burden of production at trial ultimately rests on the nonmovant, the movant must merely demonstrate an absence of evidentiary support in the record for the nonmovant's case." Cuadra v. Houston Indep. Sch. Dist., 626 F.3d 808, 812 (5th Cir. 2010) (citation and internal quotation marks omitted). The nonmovant must then "come forward with specific facts showing that there is a genuine issue for trial." Id. "An issue is material if its resolution could affect the outcome of the action." Sierra Club, Inc. v. Sandy Creek Energy Assocs., L.P., 627 F.3d 134, 138 (5th Cir. 2010) (quoting Daniels v. City of Arlington, Tex., 246 F.3d 500, 502 (5th Cir. 2001)). "An issue is 'genuine' if the evidence issufficient for a reasonable [fact-finder] to return a verdict for the nonmoving party." Cuadra, 626 F.3d at 812 (citation omitted).
The Court is not permitted to make credibility determinations or weigh the evidence. Deville v. Marcantel, 567 F.3d 156, 164 (5th Cir. 2009) (citing Turner v. Baylor Richardson Med. Ctr., 476 F.3d 337, 343 (5th Cir. 2007)). When deciding whether a genuine fact issue exists, "the court must view the facts and the inferences to be drawn therefrom in the light most favorable to the nonmoving party." Sierra Club, 627 F.3d at 138. However, "[c]onclusional allegations and denials, speculation, improbable inferences, unsubstantiated assertions, and legalistic argumentation do not adequately substitute for specific facts showing a genuine issue for trial." Oliver v. Scott, 276 F.3d 736, 744 (5th Cir. 2002) (citation omitted). Summary judgment is mandatory "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Brown v. Offshore Specialty Fabricators, Inc., 663 F.3d 759, 766 (5th Cir. 2011) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986)).
The Court first addresses Plaintiff's contention that SSL can be liable for the claims against SSM through the single-enterprise doctrine under Louisiana law. Putting aside the fact that this is a doctrine that applies under Louisiana law and Plaintiff has repeatedly argued that Mississippi law applies,2 Plaintiff asserts this theory of liability for the first time in response to SSL's motion. Plaintiff acknowledges that this is a new theory of liability but contends that he was not required to specifically plead this theory in his complaint. In support, he cites this Court's previous opinionin Wells v. Healthcare Financial Servs., LLC. No. 2:13-CV-256-KS-MTP, 2014 WL 5339377 (S.D. Miss. Oct. 20, 2014), opinion withdrawn on reconsideration on other grounds, 2014 WL 6474276 (S.D. Miss. Nov. 19, 2014). However, in Wells, the Court specifically held that "Plaintiff has not altered the theory of liability underlying her claims" and "[a]ll that has changed is the factual basis for the claim." Id. at *3. Furthermore, the Fifth Circuit has held that, because "[a] properly pleaded complaint must give 'fair notice of what the claim is and the grounds upon which it rests,'" it is not proper for a district court to consider new theories of liability first raised in response to a motion for summary judgment. De Franceschi v. BAC Home Loans Servicing, L.P., 447 F.App'x 200, 204 (5th Cir. 2012) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 698-99, 129 S. Ct. 1937, 173 L.Ed.2d 868 (2009)) (emphasis added); see also Montgomery v. Housby Mack, Inc., No. 3:15-CV-95-DPJ-FKB, 3:16-CV-23-DPJ-FKB, 2016 WL 6427275, at *5 (S.D. Miss. Oct. 28, 2016). The Court therefore will not consider this theory of liability.
Plaintiff's claim for accounting invokes Louisiana Revised Statute § 12:1319(B)(3), which gives members of an LLC a right to demand a formal accounting of the LLC's affairs. Plaintiff, however, does not dispute that he is not a member of SSL. Instead, without citation to any authority, he asserts that the Court "has the equitable power to order an accounting." (Memo. in Response [87] at p. 20.) Whether this bald assertion of the Court's authority is true is of no consequence. Plaintiff's demand for accounting is brought specifically under § 12:1319(B)(3), which does not apply to non-members. Therefore, summary judgment will be granted as to this claim, and it will be dismissed with prejudice.
SSL argues that there was no contract between it and Plaintiff and, as a result, his claims of breach of contract, tortious breach of contract, and breach of good faith and fair dealing must fail. Plaintiff argues that SSL's argument that there is no contract between them amounts to an affirmative defense of "lack of privity," which was not pleaded and therefore waived. This argument is unpersuasive because the existence of a contract is a necessary element of his breach of contract claim under Mississippi law. See Favre Prop. Mgmt., LLC v. Cinque Bambini, 863 So.2d 1037, 1044 (Miss. Ct. App. 2004) (). An affirmative defense is a defense that "assumes the plaintiff proves everything he alleges and asserts, even so, the defendant wins." Ashburn v. Ashburn, 970 So.2d 204, 213 (Miss. Ct. App. 2007) (quoting Hertz Commercial Leasing Div. v. Morrison, 567 So.2d 832, 835 (Miss. 1990)). Because Plaintiff must prove there is a contract between himself and SSL before he can...
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