Coffey v. Hamilton Cnty. Hosp.
| Decision Date | 10 December 2015 |
| Docket Number | Case No. 15-CV-7512-DDC-KGG |
| Parties | BRYAN COFFEY and ROBIN COFFEY, Plaintiffs, v. HAMILTON COUNTY HOSPITAL, Defendant. |
| Court | U.S. District Court — District of Kansas |
Plaintiffs Bryan and Robin Coffey are husband and wife and former employees of Defendant Hamilton County Hospital. Plaintiffs bring this lawsuit against their former employer, asserting claims for breach of contract and under the Kansas Wage Payment Act ("KWPA"). This matter comes before the Court on defendant's Motion for Judgment on the Pleadings (Doc. 6), against plaintiff Robin Coffey's claims only. After considering the arguments made by both parties, the Court grants defendant's Motion for Judgment on the Pleadings (Doc. 6) against Ms. Coffey's claims.
The following facts are taken from plaintiffs' Complaint (Doc. 1) and viewed in the light most favorable to them. Ramirez v. Dep't of Corr., 222 F.3d 1238, 1240 (10th Cir. 2000) ().
On about May 22, 2014, plaintiff Robin Coffey ("Ms. Coffey"), a licensed physical therapist, entered into an Employment Agreement ("Agreement") with defendant, a county hospital located in Syracuse, Kansas and established under K.S.A. § 19-4601 et seq. Under the Agreement, defendant agreed to employ Ms. Coffey as a physical therapist with an annual base salary of $105,000, plus other benefits. The Agreement provided for a three-year term of employment, but stated that either party could terminate the Agreement by giving 90 days' notice. The Agreement also required defendant to pay Ms. Coffey 90 days' severance pay, if it terminated the Agreement without cause.
In February 2015, Ms. Coffey gave defendant 90 days' written notice of her resignation, as the Agreement required. When defendant received Ms. Coffey's resignation, it terminated her employment instead of allowing her to complete the 90-day notice period. Defendant also has refused to pay Ms. Coffey the severance pay she claims the Agreement entitled her to receive. Finally, plaintiff also claims she is entitled to payment for her accrued PTO.
On April 24, 2015, Ms. Coffey and her husband filed the Complaint (Doc. 1) in this lawsuit. Ms. Coffey asserts two claims against defendant: (1) breach of contract (Count II); and (2) violation of the KWPA (Count IV). Defendant now moves for judgment on the pleadings against Ms. Coffey's two claims only—not the claims asserted by her husband.
A party may move for judgment on the pleadings under Fed. R. Civ. P. 12(c) after the pleadings are closed but early enough not to delay trial. Fed. R. Civ. P. 12(c). Courts evaluate a Rule 12(c) motion under the same standard that governs a Rule 12(b)(6) motion to dismiss. Jacobsen v. Deseret Book Co., 287 F.3d 936, 941 n.2 (10th Cir. 2002) (citing Atl. Richfield Co. v. Farm Credit Bank, 226 F.3d 1138, 1160 (10th Cir. 2000)).
The Court will grant a motion for judgment on the pleadings only when the factual allegations in the Complaint fail to "state a claim to relief that is plausible on its face," Bell Atl.Corp. v. Twombly, 550 U.S. 544, 570 (2007), or when an issue of law is dispositive, Neitzke v. Williams, 490 U.S. 319, 326 (1989). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556). "Under this standard, 'the complaint must give the court reason to believe that this plaintiff has a reasonable likelihood of mustering factual support for these claims.'" Carter v. United States, 667 F. Supp. 2d 1259, 1262 (D. Kan. 2009) (quoting Ridge at Red Hawk, L.L.C. v. Schneider, 493 F.3d 1174, 1177 (10th Cir. 2007)).
When evaluating a motion to dismiss under Fed. R. Civ. P. 12(b)(6), the Court "may consider not only the complaint itself, but also attached exhibits and documents incorporated into the complaint by reference." Smith v. United States, 561 F.3d 1090, 1098 (10th Cir. 2009) (citing Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007); TMJ Implants, Inc. v. Aetna, Inc., 498 F.3d 1175, 1180 (10th Cir. 2007); Indus. Constructors Corp. v. United States Bureau of Reclamation, 15 F.3d 963, 964-65 (10th Cir. 1994)). A court "'may consider documents referred to in the complaint if the documents are central to the plaintiff's claim and the parties do not dispute the documents' authenticity.'" Id. (quoting Alvarado v. KOB-TV, L.L.C., 493 F.3d 1210, 1215 (10th Cir. 2007)). Here, the Court considers the Agreement between Ms. Coffey and defendant because it is a document incorporated into the Complaint by reference, it is central to Ms. Coffey's claim, and the parties do not dispute its authenticity. See Doc. 1 at 2-3 (Complaint ¶ 9) (referencing the Agreement); see also Doc. 7-1 (Agreement).
Defendant seeks judgment on the pleadings under Fed R. Civ. P. 12(c), against Ms. Coffey's breach of contract and KWPA claims. Defendant contends that both of Ms. Coffey'sclaims fail because they are premised on her Agreement which is ultra vires and unenforceable under Kansas law. Thus, defendant argues, the Court must dismiss the two claims Ms. Coffey asserts in the Complaint.
To decide defendant's motion for judgment on the pleadings, the Court must determine whether the Agreement between Ms. Coffey and defendant is an enforceable contract. The Court applies the law of the forum state in this diversity action to answer this question. Armijo v. Ex Cam, Inc., 843 F.2d 406, 407 (10th Cir. 1988) (citation omitted).
"In Kansas, governmental agencies and corporations, including municipal corporations, are creatures of the legislature and have only such powers as are conferred by law or as may be necessarily implied to give effect to those powers specifically granted." Alderfer v. Bd. of Trs., 261 F. App'x 147, 150 (10th Cir. 2008) (). One of those powers is the power to contract. Id. A governmental agency in Kansas "can only enter into such contracts that it has been granted authority to make and all persons contracting with such agency or corporation are deemed to know its limitations." Id. (); see also Genesis Health Club, Inc. v. City of Wichita, 181 P.3d 549, 551, Syl. ¶ 8 (Kan. 2008) ().
If a government agency enters into a contract without the power or authority to do so, the contract is ultra vires and unenforceable under Kansas law, and no further inquiry into the contract's validity is necessary. Genesis Health Club, Inc., 181 P.3d at 551, Syl. ¶ 6; see alsoBlevins v. Bd. of Cty. Comm'rs, 834 P.2d 1344, 1351 (Kan. 1992); Wiggins, 916 P.2d at 721. When deciding whether a governmental agency possesses a particular power, courts should resolve any reasonable doubts about the existence of such power against its existence. Wichita Pub. Schs. Emps. Union, Local No. 513 v. Smith, 397 P.2d 357, 359 (Kan. 1964) (citation and internal quotation marks omitted).
Here, the parties agree that defendant is a county hospital created under Kansas statute. See K.S.A. § 19-4601 et seq. K.S.A. § 19-4610 confers certain powers and duties on the board of directors for county hospitals. Among them, the statute authorizes county hospital boards "to enter into employment contracts to engage the services of an administrator or chief executive officer to manage the affairs of the hospital, to establish compensation for such services and to establish the terms of the engagement." K.S.A. § 19-4610(a). Thus, the plain language of the statute authorizes a county hospital board to enter into an employment contract with an administrator or chief executive officer. But, the statute provides no authority for the board to enter into contracts with non-administrator employees.
Relying on this statute, defendant argues that the Agreement at issue here is ultra vires and thus unenforceable because Kansas law provides no authority for a county hospital to enter into an employment contract with an employee other than its administrator. Defendant asserts that the Tenth Circuit already has decided this issue in Alderfer v. Board of Trustees, 261 F. App'x 147 (10th Cir. 2008). In Alderfer, plaintiff Kimberly Alderfer alleged that her former employer, the Board of Trustees of the Edwards County [, Kansas] Hospital and Healthcare Center, terminated her employment as hospital administrator in breach of her employment agreement and thus violated her due process rights. Id. at 148. The district court granted defendant's summary judgment motion, concluding that plaintiff's claims were based on an ultravires and unenforceable contract because the hospital board lacked authority to enter into a fixed-term employment contract with plaintiff. Id. at 149. The Tenth Circuit affirmed that decision. Id. at 153.
When the Tenth Circuit decided Alderfer, K.S.A. § 19-4610 authorized a hospital "'to appoint an administrator, to fix the compensation thereof, and to remove such administrator.'" Id. at 150 (quoting K.S.A. § 19-4610(a)) (emphasis omitted). The Circuit concluded that the power to "appoint" an administrator, as conferred by the statute, did not include the power to contract with an administrator. Id. at 150-52. The Circuit explained that the statute's language "does not authorize a hospital...
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