Guldseth v. Family Med. Assocs. LLC

• Decision Date: 16 August 2022
• Docket Number: 21-1212
• Citation: 45 F.4th 526
• Parties: David GULDSETH, MD, Plaintiff, Appellant, v. FAMILY MEDICINE ASSOCIATES LLC; Gregory Bazylewicz, MD, Defendants, Appellees.
• Court: U.S. Court of Appeals — First Circuit

45 F.4th 526

David GULDSETH, MD, Plaintiff, Appellant,

v.FAMILY MEDICINE ASSOCIATES LLC; Gregory Bazylewicz, MD, Defendants, Appellees.

No. 21-1212

United States Court of Appeals, First Circuit.

August 16, 2022

Keith L. Sachs, with whom DDSK Law was on brief, for appellant.

Guy P. Tully, with whom Jackson Lewis P.C. was on brief, for appellees.

Before Barron, Chief Judge, Thompson and Howard, Circuit Judges.

THOMPSON, Circuit Judge.

Today's case illustrates the reason why the age-old adage "get that in writing" withstands the test of time. Following an employment relationship gone wrong, David Guldseth, MD, brought a seven-count complaint against his former employer, Family Medicine Associates LLC ("FMA"), and one of its members, Gregory Bazylewicz, MD (together with FMA, the "FMA Defendants"). The district court granted the FMA Defendants' motion for summary judgment on all seven counts. On appeal, Dr. Guldseth challenges that ruling on six counts, conceding the futility of one. After careful review, we affirm.

WHAT LED US HERE

A Perfect Match

In the spring of 2012, Dr. Guldseth was a licensed physician in Tennessee looking for a new job to relocate his family to either the East Coast or California. A recruiter connected him with FMA located in Manchester, Massachusetts and Dr. Bazylewicz, a physician and FMA partner.¹ Dr. Bazylewicz was in the market for a new doctor to take over his practice, as he hoped to retire in the near future. So Dr. Bazylewicz reached out via email to Dr. Guldseth to inquire about his interest in taking over the practice at FMA.

In May, the two doctors spoke over the phone about the opportunity. Dr. Guldseth claims that during this call, very clear promises were made to him by Dr. Bazylewicz about what would be included in the deal. If he joined the practice, Dr. Guldseth would take over Dr. Bazylewicz's practice as well as his partnership interest after eighteen months, Dr. Bazylewicz supposedly said. Dr. Guldseth also claims that Dr. Bazylewicz told him that in addition to the money he would make from seeing patients, his compensation would include income from a lab that FMA owned and the rental income on the office building. Unfortunately for Dr. Guldseth, this conversation was not recorded or transcribed. After these positive conversations and an in-person visit, FMA sent Dr. Guldseth a written offer of employment in July of 2012.

The employment offer from FMA laid out the key terms of Dr. Guldseth's prospective employment -- but (and this is the brass ring) it did not mention partnership at all. A few weeks after receiving the offer document, Dr. Guldseth signed and returned it. FMA then sent Dr. Guldseth a detailed, formal draft employment agreement (the "Employment Agreement") spelling out the terms of the relationship. Dr. Guldseth reviewed the agreement without seeking advice from legal counsel. After assessing the written proposal, Dr. Guldseth contacted FMA's administrator, Elizabeth Hill, and posed several detailed questions about specific aspects of the agreement. He also requested a few changes to the document, some of which were granted. A revised document with those changes was sent to Dr. Guldseth, and he finalized it with his John Hancock and sent it back to FMA.

The Employment Agreement laid out how Dr. Guldseth would be compensated for his services at FMA. It stipulated that for the first six months of employment, Dr. Guldseth would be paid $10,000 biweekly. For the next twelve months after that, Dr. Guldseth would receive 60 percent of his team's Annualized Net MD Income.² Following eighteen months of employment, Dr. Guldseth would be paid 100 percent of that same Annualized Net MD Income. The agreement further stated that either party could terminate the employment relationship without cause with ninety days' written notice. Significant to this dispute, the Employment Agreement contained an integration clause that covered any prior agreements, understandings, and representations, whether oral or written. And much like the employment offer letter, the Employment Agreement made no mention of a partnership interest.

To be sure, there was some pre-agreement-signing chatter in the emails about Dr. Guldseth maybe becoming a partner. In an email to Dr. Guldseth, Dr. Bazylewicz described the position as "a tremendous opportunity to eventually be a partner in the group." In a later email about vacation time, Hill also mentioned that things would be negotiable "once you are a[n] owner." And in another email, Dr. Guldseth asked what the difference was between his eventual compensation as an owner and the 100 percent of Annualized Net MD Income compensation for months eighteen through twenty-four -- though Dr. Guldseth's email seems to suggest that he thought he would become an owner at twenty-four months. Hill's email in response didn't answer the question, but Dr. Guldseth claims that two days later at an in-person meeting, Dr. Bazylewicz and Hill assured him that Dr. Bazylewicz's "practice would transfer" to Dr. Guldseth after eighteen months.

Nonetheless, Dr. Guldseth signed the agreement that contained no such promise of partnership (we repeat, without the advice of counsel). After relocating his family to the Bay State, Dr. Guldseth started working at FMA in October of 2012. With an eye towards retirement, Dr. Bazylewicz continued with the group until some time in late 2012 or early 2013.

Expectation Versus Reality: The Breakup

Over time, Dr. Guldseth came to believe he was not being paid what he was due. In May of 2014, Dr. Guldseth contacted Hill to inquire, chiefly, about when he would obtain Dr. Bazylewicz's partnership interest. That same day, another FMA partner, Dr. Steven Barrett (who had apparently been forwarded the email by Hill), responded to Dr. Guldseth by disputing his characterization of the employment arrangement. It was not his understanding, Dr. Barrett contended, that Dr. Guldseth had ever been offered any partnership interest in FMA. After this exchange, a simmering misunderstanding lingered between Dr. Guldseth and FMA, which eventually came to a head. In June 2014, FMA sent Dr. Guldseth a letter terminating his Employment Agreement effective October 28, 2014 (the end of his two-year term of employment). The letter gave no reason for Dr. Guldseth's termination. Days later, Dr. Guldseth sat down with the partners of FMA and gave them a presentation about the deal he believed he had struck with Dr. Bazylewicz. It didn't change FMA's position.

About a week before his departure from FMA, Dr. Guldseth received a letter from Hill (we'll call it the "Additional Payment Agreement") stating that he would receive his final paycheck on October 28, 2014, and that his accounts receivable for services already performed would be paid out to him within ninety days. But as Dr. Guldseth tells it, he was not paid all the accounts receivable that were due to him. He also asserts that he was not paid the full 60 percent of his team's Annualized Net MD Income for months seven through eighteen.

This Lawsuit

Nearly three years after he was let go, Dr. Guldseth filed suit against the FMA Defendants alleging breach of contract, breach of the implied covenant of good faith and fair dealing, fraud, unjust enrichment/quantum meruit, promissory estoppel, and nonpayment of wages, and sought an accounting (which is not subject to this appeal).³ Eventually, the FMA Defendants filed a motion for summary judgment on all counts, which the district court granted. Dr. Guldseth appealed, reprising here the arguments he made below.

OUR LENS

We review the district court's grant of summary judgment de novo. Brader v. Biogen, 983 F.3d 39, 53 (1st Cir. 2020). Summary judgment should be granted when there is no genuine issue of any material fact and the moving party is entitled to judgment as a matter of law. Id.; see also Fed. R. Civ. P. 56(a). When we look at the evidence, all reasonable inferences are drawn in favor of Dr. Guldseth. Tutor Perini Corp. v. Banc of America Sec. LLC, 842 F.3d 71, 84 (1st Cir. 2016). But he is not permitted to rely on "conclusory allegations, improbable inferences, and unsupported speculation." Theidon v. Harvard Univ., 948 F.3d 477, 496 (1st Cir. 2020) (quoting Coll v. PB Diagnostic Sys., 50 F.3d 1115, 1121 (1st Cir. 1995) ). As we've said before, summary judgment is "the put up or shut up moment in litigation." Jakobiec v. Merrill Lynch Life Ins. Co., 711 F.3d 217, 226 (1st Cir. 2013) (quoting Goodman v. Nat'l Sec. Agency, Inc., 621 F.3d 651, 654 (7th Cir. 2010) ). If the moving party meets their initial burden of showing there's no genuine factual issue for trial, the non-moving party must come armed with some evidence to show that a reasonable jury could find for them, id., lest their claims get caught in the summary-judgment scythe, Theidon, 948 F.3d at 494.

OUR TAKE

Breach of Contract

Dr. Guldseth first claims that he entered into three separate contracts with FMA, all three of which FMA breached. The first agreement he alleges was breached is the "Partnership Transfer Agreement." That agreement isn't your typical ink-on-paper contract, but rather an oral one: He says Dr. Bazylewicz agreed to transfer his partnership interest if Dr. Guldseth agreed to work at FMA for eighteen months. The second agreement is the written one, the Employment Agreement, which set out the terms of Dr. Guldseth's employment. Dr. Guldseth says this agreement was breached when FMA failed to pay him 60 percent of his team's Annualized Net MD Income during months seven through eighteen of his employment. Finally, he argues that the FMA Defendants breached the "Additional Payment Agreement" -- where he was told in a letter that he would be paid for the accounts receivable for services performed by his team prior to his 2014 departure within ninety days (less a 6-percent collection fee).

As we take a look at each of those agreements, we keep in mind that to make out a breach-of-contract claim,...