Cagin v. McFarland Clinic, P.C.

• Decision Date: 31 July 2006
• Docket Number: No. 05-3592.,05-3592.
• Citation: 456 F.3d 903
• Parties: Charles CAGIN, Appellant, v. The MCFARLAND CLINIC, P.C., Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

456 F.3d 903

Charles CAGIN, Appellant, v. The MCFARLAND CLINIC, P.C., Appellee.

No. 05-3592.

United States Court of Appeals, Eighth Circuit.

Submitted: April 20, 2006.

Filed: July 31, 2006.

Kenneth L. Butters, argued, Des Moines, Iowa, for appellant.

Jordan B. Hansell, argued, Des Moines, Iowa (Randall D. Armentrout, Des Moines, Iowa, on the brief), for appellee.

Before ARNOLD and COLLOTON, Circuit Judges, and BOGUE,¹ District Judge.

BOGUE, District Judge.

Dr. Charles Cagin ("Cagin") appeals the district court's² adverse grant of summary judgment in his breach of contract action against The McFarland Clinic (the "Clinic"). Cagin argues the district court erred (1) in finding no material fact questions existed regarding the Clinic's alleged breach of an employment contract, and (2) in concluding that extrinsic evidence should not be admitted to aid in interpreting the employment contract. We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Cagin was an interventional cardiologist in solo practice in Des Moines, Iowa. The Clinic was a multi-specialty medical clinic located in Ames, Iowa. In 1999, Cagin began negotiating with Dale Anderson, Chief Executive Officer of the Clinic, regarding Cagin joining the Clinic as a cardiologist in an office the Clinic was opening in Des Moines. Cagin understood that as the first cardiologist hired, he would be the only physician in the Cardiology Department when he started. Cagin estimated he would be working as the only cardiologist in the department for six to eighteen months. Cagin was told that, if he joined the Clinic's Des Moines office, he would receive sufficient backup and call coverage from other cardiologists the Clinic would hire in the Des Moines area.

The parties entered a three-year employment agreement (the Agreement) on January 10, 2000, and Cagin soon began working for the Clinic. Under the Agreement, Cagin was entitled to six weeks of vacation and two weeks of professional meeting time per year. Vacation and professional meeting time could not be carried forward. The Clinic did not keep track of vacation or professional meeting time for physicians and did not pay for vacation or professional meeting time a physician did not take. Cagin received a Physician Policy Manual ("Manual"), which was incorporated into the Agreement. The Manual set out a physicians compensation plan, holiday schedule, fringe benefits, provided that Clinic physicians were entitled to seven holidays per year, and provided they would work a minimum of four and one-half days per week. Cagin testified in his deposition that he understood that the policy stated that if he were in a department with only one physician, he would be responsible for all call coverage. The Agreement did not provide that the Clinic would furnish call coverage for Cagin by any particular date, or that Cagin would be provided with any particular level of call coverage. After negotiations regarding Cagin's salary and the length of the Agreement, during which Cagin was represented by counsel, the parties agreed that a salary of $275,000 per year would compensate Cagin for cardiological services, call coverage time, and time spent on vacation and in continuing medical education meetings. Cagin could earn more than the $275,000 guaranteed salary, under the Clinic's "Compensation Plan for Physicians" if he exceeded certain annual production goals. The $275,000 salary was guaranteed for three years, after which Cagin's compensation was to be "as determined by the Board of [the Clinic]." The Agreement contained an integration clause, which provided that it was the entire agreement between the parties, superceding all negotiations, prior and contemporaneous discussions, preliminary agreements, and understandings of the parties as to the subject matters of the Agreement. The Agreement also provided that any modification thereto must be in writing.

Cagin worked for the Clinic from January 2000 to August 2003. In July 2000, Dr. Narish Solankhi ("Solankhi") joined the Clinic Cardiology Department, practicing in Ames and performing interventional cardiologic procedures in Des Moines. In September 2001, Dr. Charles Laham ("Laham") began working in the Cardiology Department in the same office as Cagin in Des Moines. Cagin later became displeased with the amount of call coverage he received from Solankhi and Laham.

From 2000 to 2002, Cagin's salary exceeded his guaranteed salary of $275,000. In July 2002, the Clinic decided to change its compensation system for the next year. Under the new system in 2003, Cagin, by then a shareholder of the Clinic, earned less than he had under the terms of the Agreement. Cagin never complained to the Clinic's board of directors about his workload or call coverage, and never requested a reduced call requirement from the Clinic's board. Although Cagin claims he worked "24/7" during his time with the Clinic, this was shown to be an exaggeration during his deposition, when Cagin stated he took six weeks of vacation during that time. Cagin also admitted he took adequate time off for professional meetings to keep his medical license. Cagin did complain verbally about vacation time and backup and call coverage to Roger Kluesner, the Clinic's Chief Operating Officer, and Joyce Lee, a registered nurse who was administrative head of the Cardiology Department.

Cagin resigned from the Clinic in August 2003. Cagin left the Clinic because he felt mistreated by the Clinic; because his 2003 income was well below his previous annual salaries, largely due to a new formula that changed the way overhead expenses were assigned; because he had worked "24/7" for three years without a vacation; and because the Clinic did not provide him with adequate backup and call coverage.

Cagin filed suit against the Clinic on February 5, 2004, alleging breach of the Agreement and violations of the Iowa Wage Payment Collections Act,³ and seeking punitive damages. In granting summary judgment to the Clinic, the district court opined that "this case is about Cagin's `hindsight' regret that he did not avail himself of the full benefits allowed under the Agreement." The district court "believe[d] that Cagin has only himself to blame for his failure to take a full six weeks of vacation each year; to attend continuing medical education programs for up to ten days per year[;] and to not work holidays." The court ruled Cagin was paid as much as he was promised in the years 2000, 2001, and 2002, regardless of whether he took six weeks of vacation, worked every holiday, or took less than ten days allowed for medical education. The court noted the Clinic did not maintain records for physicians concerning how much time they took out of the office on a yearly basis. Cagin also kept no such records. The Clinic had a "use it or lose it" policy with regard to leave, and "only Cagin knew how much time he was entitled to be gone, and more importantly, how much time he actually took." In sum, the district court concluded Cagin had been paid the full salary to which he was entitled, and no evidence showed the Clinic breached the Agreement.

DISCUSSION

Iowa law determines the rights of the parties in this diversity action. R & B Appliance Parts, Inc. v. Amana Co., L.P., 258 F.3d 783, 786 (8th Cir.2001). We review de novo both the district court's interpretation of Iowa law, as well as the grant of summary judgment. Ehlis v. Shire Richwood, Inc., 367 F.3d 1013, 1015-16 (8th Cir.2004).

A. Material Factual Disputes

Cagin first contends there were material factual disputes in this case that precluded summary judgment for the Clinic. Cagin asserts he worked "24/7" and was unable to take professional meeting time, vacations, weekends, or holidays off as provided in the Agreement. Due to "inadequate back up and call coverage," Cagin states, "he was effectively denied these benefits which he had bargained for." Further, although the vacation and other time off were calculated into his guaranteed compensation, Cagin argues he is "still `out' the taking of the actual time off so that he could spend it with his family and at leisure." The Clinic responds, arguing it was Cagin's "responsibility to cover the patients he treated in order to take personal time off from work." Cagin's claims, it argues, "stem from the fact that he became angry about the length of time it took the Clinic to recruit other physicians" to his department and "about the quantity of coverage he received from the two physicians that were recruited." Further, the Clinic contends, Cagin could have negotiated for a timetable as to the recruitment of physicians in his department or as to the amount of his call coverage.

Under Iowa law, "[i]n a breach-of-contract claim, the complaining party must prove: (1) the existence of a contract; (2) the terms and conditions of the contract; (3) that it has performed all the terms and conditions required under the contract; (4) the defendant's breach of the contract in some particular way; and (5) that plaintiff has suffered damages as a result of the breach." Molo Oil Co. v. River City Ford Truck Sales, Inc., 578 N.W.2d 222, 224 (Iowa 1998). "A party...