Franco v. State ex rel. Bd. of Regents of the Univ. of Okla.

• Decision Date: 09 April 2020
• Docket Number: Case No. 116,876
• Citation: 482 P.3d 1
• Parties: Kenneth L. FRANCO, M.D., Plaintiff/Appellee, v. STATE of Oklahoma, EX REL. BOARD OF REGENTS OF the UNIVERSITY OF OKLAHOMA, Defendant/Appellant.
• Court: United States State Court of Criminal Appeals of Oklahoma. Court of Civil Appeals of Oklahoma

482 P.3d 1

Kenneth L. FRANCO, M.D., Plaintiff/Appellee,

v.STATE of Oklahoma, EX REL. BOARD OF REGENTS OF the UNIVERSITY OF OKLAHOMA, Defendant/Appellant.

Case No. 116,876

Court of Civil Appeals of Oklahoma, Division No. 2.

FILED APRIL 9, 2020

Mandate Issued: December 30, 2020

Stanley M. Ward, Barrett T. Bowers, WARD & GLASS, L.L.P., Norman, Oklahoma, for Plaintiff/Appellee

Heidi J. Long, Stephen Martin, UNIVERSITY OF OKLAHOMA, OFFICE OF LEGAL COUNSEL, Norman, Oklahoma, Michael Burrage, WHITTEN BURRAGE, Oklahoma City, Oklahoma, for Defendant/Appellant

OPINION BY JOHN F. FISCHER, JUDGE:

¶1 The Board of Regents of the University of Oklahoma appeals a judgment entered on a jury verdict in favor of Dr. Kenneth L. Franco in this breach of contract case. Because Dr. Franco failed to prove that he entered into a contract with the University, Dr. Franco's breach of contract claim fails as a matter of law. Dr. Franco's claim should not have been submitted to the jury. Therefore, the Judgment in favor of Dr. Franco is reversed, and this case is remanded with instructions to enter judgment for the Board of Regents of the University of Oklahoma.

BACKGROUND

¶2 This case concerns a purported contract between Dr. Franco and the University of Oklahoma's College of Medicine. The College is part of the Health Sciences Center and both are part of the University of Oklahoma. The College and the Health Sciences Center are supervised by the University's Board of Regents. The rules and procedures for employing physicians at the College have been established by the Regents and are contained in a Faculty Handbook.

¶3 In late 2014, Dr. Harold Burkhart, the Chief of the Division of Cardiovascular and Thoracic Surgery, and his superior, Dr. Russell Postier, the Chair of the Department of Surgery in the University's College of Medicine, discussed adding an adult cardiac surgery program and employing two cardiac surgeons. Dr. Franco is a cardiothoracic surgeon. In May of 2015, Dr. Franco expressed an interest in one of the new positions. During the summer of 2015, Dr. Franco traveled to Oklahoma and was interviewed by some of those who would be involved in the cardiac surgery program, including Dr. Burkhart and Dr. Postier.

¶4 Eventually, Dr. Franco received a letter dated August 31, 2015, signed by Dr. Postier. The letter stated, in part: "I am pleased to provide you this letter of offer ... regarding an appointment in the Department of Surgery at the ... College of Medicine." The letter also stated: "Official letters of appointment come from the Senior Vice President and Provost of the University of Oklahoma Health Sciences Center and are contingent upon approval of the appointment by the Board of Regents of the University of Oklahoma." Dr. Franco was asked to acknowledge receipt of the letter and acceptance of its terms within ten days. The letter stated: "When we receive the acknowledgement from you, we will proceed to finalize this faculty appointment." The letter concluded: "Later you will receive a contract from the University that will formally offer you a position."

¶5 The Acknowledgment attached to the end of the letter provides: "I hereby acknowledge receipt of this Preliminary Letter of Offer and accept the terms of the offer as stipulated." On September 3, 2015, Dr. Franco signed the Acknowledgment and communicated his acceptance of the Preliminary Letter of Offer to College officials.

¶6 However, before Dr. Franco received an official letter of appointment from the Senior Vice President and Provost or approval of an appointment from the Board of Regents, Dr. Burkhart decided that Dr. Franco should not be hired for the adult cardiac unit. Dr. Burkhart informed Dr. Franco of this decision during a telephone conversation on September 10, 2015. Dr. Franco received a letter dated September 14, 2015, confirming that conversation.

¶7 Dr. Franco filed this suit alleging that the August 31, 2015 letter constituted a contract of employment and that the Regents had breached this contract when the University refused to finalize Dr. Franco's employment. The case was tried to a jury and the jury returned a verdict in favor of Dr. Franco in the amount of $397,000. The Regents appeal the Judgment entered on that verdict.

STANDARD OF REVIEW

¶8 Dr. Franco contends that whether the August 31, 2015 letter was a preliminary offer or an official offer of appointment "is immaterial to the analysis and determination of the legal issues before the Court to decide." This argument could not be more mistaken. The fundamental legal issue in this case is whether the August 31, 2015 letter was an offer to contract or an offer to enter into negotiations that might result in a contract. Until that legal issue is correctly resolved, there are no facts for a jury to decide. "[D]etermining the proper legal procedure for a particular controversy presents an issue of law, and is reviewed by a non-deferential de novo standard." Christian v. Gray , 2003 OK 10, ¶ 40, 65 P.3d 591. See also Lincoln Farm, L.L.C. v. Oppliger , 2013 OK 85, ¶ 12, 315 P.3d 971 (stating that appellate jurisdiction to review the district court's determination of an issue of law is de novo). De novo review involves a plenary, independent, and non-deferential examination of the trial court's legal rulings. Neil Acquisition L.L.C. v. Wingrod Inv. Corp ., 1996 OK 125, n.1, 932 P.2d 1100.

ANALYSIS

¶9 The Regents raise eight issues in this appeal. Seven concern the legal question of whether the Regents entered into a contract with Dr. Franco that could form the basis for his breach of contract action. We find these issues dispositive, because the evidence regarding these issues supports only one conclusion—Dr. Franco never received an offer of employment from the Regents. This conclusion makes it unnecessary to address any of the University's other appellate issues.

I. The Trial Court Record

¶10 Although the parties disagree on the legal significance of the relevant facts, those facts are not in material dispute. In 2015, the University of Oklahoma's College of Medicine recruited physicians for two cardiac surgeon positions. Dr. Burkhart and his superior, Dr. Postier, were the College employees principally involved in this effort. During this process, Dr. Franco became a candidate for one of the positions.

¶11 Dr. Franco was interviewed by phone and he was invited to Oklahoma twice to interview for the position. During his time in Oklahoma, Dr. Franco met with College and Health Sciences Center personnel. He also met with the Chief of the medical staff at the Veterans Administration Medical Center in Oklahoma City, where the new cardiac surgeons would be expected to spend one-half of their time. Neither hospital had an adult cardiac surgery program at the time, and discussions centered on what Dr. Franco thought would be necessary to establish those programs. After the second interview, Dr. Burkhart called Dr. Franco and told him that the College was looking at another candidate.

¶12 In early August, Dr. Burkhart learned that the other candidate had decided not to pursue employment with the College. On August 19, 2015, Dr. Burkhart called Dr. Franco and asked him if he was still interested in the position. When Dr. Franco stated that he was, Dr. Burkhart stated that he and Dr. Postier had decided to offer the position to Dr. Franco. Dr. Burkhart said College officials would be in contact regarding the terms of a contract.¹

¶13 On August 26, 2015, Dr. Franco was mailed a letter signed by Dr. Postier, "regarding a faculty appointment in the Department of Surgery at the University of Oklahoma College of Medicine." The first sentence of the letter states: "I am pleased to provide you this letter of offer ...." The second sentence of the letter provides: "Official letters of appointment come from the Senior Vice President and Provost of the University of Oklahoma Health Sciences Center and are contingent upon approval of the appointment by the Board of Regents of the University of Oklahoma." The second paragraph of the letter advised Dr. Franco that the Faculty Handbook for the Health Sciences Center was available for his review and provided the internet web page address where Dr. Franco could find the Handbook.

¶14 The August 26 letter proposed an initial start date and listed Dr. Franco's "expected duties." Included in that description was the statement that Dr. Franco would also have an appointment at the Oklahoma City VA medical center for "4/8ths" of his time. The letter set out Dr. Franco's anticipated total compensation and fringe benefits. From previous discussions, Dr. Franco understood that the federal government would be responsible for approximately $200,000 of his $750,000 anticipated compensation. The letter also identified six specific contingencies on which the offer was based. The letter stated that the offer was also contingent on Dr. Franco's agreement to "abide by all University policies governing faculty." Dr. Franco was asked to acknowledge his receipt and acceptance of the terms set out in the "Preliminary Letter of Offer" within ten days. On receipt of that acknowledgment, the letter states "we will proceed to finalize this faculty appointment." The letter concluded: "Later you will receive a contract from the University that will formally offer you a position."

¶15 Dr. Franco did not accept the terms set out in the August 26 letter. Instead, he called the administrator of the Department of Surgery and requested two changes, one concerning his compensation and the other to delete one of the six "contingencies" because it was not applicable to his area of practice. Those changes were made and a second letter, dated August 31, 2015, but otherwise identical to the first, was mailed to Dr. Franco. This letter was also signed by Dr. Postier.

¶16 However, the two changes discussed with the Department's administrator were not the only contract terms that concerned Dr. Franco. On August 27, 2015, Dr....