Hamlet H.M.A., LLC v. Hernandez

• Decision Date: 16 October 2018
• Docket Number: No. COA 17-744,COA 17-744
• Parties: HAMLET H.M.A., LLC d/b/a Sandhills Regional Medical Center, Plaintiff, v. Pedro HERNANDEZ, M.D., Defendant.
• Court: North Carolina Court of Appeals

262 N.C.App. 51

821 S.E.2d 600

HAMLET H.M.A., LLC d/b/a Sandhills Regional Medical Center, Plaintiff,

v.Pedro HERNANDEZ, M.D., Defendant.

No. COA 17-744

Court of Appeals of North Carolina.

Filed: October 16, 2018

Thomerson Freeman & Rogers P.C., by William S. F. Freeman, for plaintiff-appellee.

Mark L. Hayes, Greensboro, for defendant-appellant.

STROUD, Judge.

Defendant Pedro Hernandez, M.D. ("defendant") appeals a judgment upon a jury verdict finding him liable for breach of contract and an order denying his motions for judgment notwithstanding the verdict and for a new trial. Defendant has raised three issues on appeal regarding the judgment and order. First, defendant has failed to demonstrate that the trial court abused its discretion in denying his motion for new trial based upon his claim of a compromise verdict. Second, the trial court improperly dismissed defendant's Unfair and Deceptive Trade Practices ("UDTP") counterclaim based upon the "learned profession" exception to N.C. Gen. Stat. § 75.1-1. Last, defendant failed to preserve his argument regarding erroneous admission of parol evidence. We therefore reverse and remand in part and affirm in part the trial court's judgment.

I. Background

Defendant is a physician who moved from Maine to North Carolina to be closer to his family. He had been practicing in Maine since 2008. In March of 2011, before he and his wife moved, defendant used an online portal called MedHunters to look for open medical positions in North Carolina. He sent seven hospitals an interest email, including plaintiff Sandhills Regional Medical Center, a hospital owned and operated by plaintiff Hamlet H.M.A. LLC.¹ Plaintiff responded immediately, and on 16 March and 17 March 2011, plaintiff paid for defendant to visit the Hospital and plaintiff. Plaintiff made an offer to defendant five days after his visit.

The original offer was for defendant to set up his own independent practice and to be an independent contractor for plaintiff. The offer guaranteed a minimum collection amount for the first 18 months of the 36-month contract. The income guarantee was described in the email with the offer attached. Mr. Michael McNair, the CEO of the Hospital at the time, testified: "the theory is, as his practice develops over a period of time and his practice starts bringing in more money from him seeing patients and doing surgery and those kind of things, then the amount that you get paid [by plaintiff] gets less."

Plaintiff also offered defendant an employment option as an addendum to the original offer, which plaintiff could exercise at the end of the first 18 months of the contract. The employment option section specified that the option would "at a minimum, include the following material terms and conditions: Proposed Duration: 18 months. Proposed Compensation Methodology for Employment Agreement: Base Salary $325,000 with a bonus based on worked RVUs."²

Defendant clarified in two emails dated 23 March 2011 and 24 March 2011 that he was not comfortable with this arrangement. Instead, he asked to be an employee with a regular salary like the other doctors employed by Plaintiff. Plaintiff sent defendant an employment offer on 25 March 2011 with a base salary of $275,000 and several other incentives. Defendant responded four hours later that he did not think it made sense to accept less money for an employee position or status.

Defendant then sent plaintiff an email asking to extend the time period of guaranteed income to 24 months, rather than 18 months. Plaintiff replied that it could not extend the period but raised the monthly salary from $47,616.82 to $49,500.00 and also added a signing bonus of $30,000.00. After further negotiations, the parties entered into a Physician Recruitment Agreement on 29 March 2011.

Defendant started his practice at the Hospital on 1 September 2011 and was to work until 1 September 2014 based upon the 36-month contract requirement. The practice was not successful, and at the end of the first 18-month period, defendant timely notified plaintiff of his desire to exercise the employment option in his contract. But plaintiff did not give defendant an employment contract at the end of the 18-months. The Physician Recruitment Agreement defendant signed required plaintiff to offer defendant an employment contract on one of plaintiff's standard template forms at the end of the first 18 months, should defendant exercise the option. Plaintiff believed the Physician Recruitment Agreement itself to be the employment contract, since it was on a standard template form and stated the amount his salary would be as an employee, so plaintiff did not send defendant an employee contract.

Defendant closed his practice in April 2013, so defendant did not practice for the full 36-month period. Plaintiff informed defendant that whether defendant became an employee of Plaintiff or not, he was still required to practice for the 36 month period. When defendant did not receive an 18-month employment contract from plaintiff, he began looking for other work. Plaintiff made several requests to defendant demanding repayment of its loans made during defendant's first 18 months of practice, but defendant did not repay them.

On 29 August 2014, plaintiff filed a complaint against defendant alleging breach of contract and demanding repayment of the entire amount paid to defendant, a total of 21 payments amounting to $902,259.66. Defendant filed an answer with counterclaims for breach of contract, fraud, unfair or deceptive trade practices, and unjust enrichment. A jury trial was held in Superior Court in Richmond County at the end of August and beginning of September 2016. The jury returned a verdict for plaintiff for $334,341.14. Defendant filed a Motion for Judgment Notwithstanding the Verdict and a Motion for New Trial on 8 September 2016. On 9 January 2017, the trial court entered judgment on the jury verdict and issued an order denying both of defendant's post-trial motions. Defendant timely appealed to this Court from both the order denying the motions and the judgment.

II. Compromise Verdict

Defendant contends that the jury reached an impermissible compromise verdict when it found that defendant owed $334,341.14, instead of $902,259.66.

a. Standard of Review

We review an appeal from denial of a motion for new trial based upon an alleged compromise verdict for abuse of discretion. See Smith v. White , 213 N.C. App. 189, 195, 712 S.E.2d 717, 721 (2011) ("An appeal from a trial court's denial of a motion for new trial because of an alleged compromise verdict is reviewed for an abuse of discretion."). The party seeking to show an abuse of discretion has the burden of demonstrating that the verdict was a compromise. Id . Our Supreme Court has stressed that we should not review this discretionary ruling except in "rare cases":

It has been long settled in our jurisdiction that an appellate court's review of a trial judge's discretionary ruling either granting or denying a motion to set aside a verdict and order a new trial is strictly limited to the determination of whether the record affirmatively demonstrates a manifest abuse of discretion by the judge. The legislative enactment of the Rules of Civil Procedure in 1967 did not diminish the inherent and traditional authority of the trial judges of our state to set aside the verdict whenever in their sound discretion they believe it necessary to attain justice for all concerned, and the adoption of those Rules did not enlarge the scope of appellate review of a trial judge's exercise of that power. The principle that appellate review is restricted in these circumstances is so well established that it should not require elaboration or explanation here. Nevertheless, we feel compelled by the Court of Appeals' disposition of the case before us to restate and reaffirm today the basic tenets of our law which would permit only circumscribed appellate review of a trial judge's discretionary order upon a Rule 59 motion for a new trial. Those tenets have been competently set forth in innumerable prior opinions of this Court, and, for instructive purposes, we provide the following sampling therefrom.

In Settee v. Electric Ry. , 170 N.C. 365, 367, 86 S.E. 1050, 1051 (1915), the Court evinced a positive hesitancy to review such discretionary rulings by the trial court except in rare cases: While the necessity for exercising this discretion, in any given case, is not to be determined by the mere inclination of the judge, but by a sound and enlightened judgment in an effort to attain the end of all law, namely, the doing of even and exact justice, we will yet not supervise it, except, perhaps, in extreme circumstances, not at all likely to arise; and it is therefore practically unlimited.

Worthington v. Bynum , 305 N.C. 478, 482, 290 S.E.2d 599, 602-03 (1982) (citations and quotation marks omitted).

b. Analysis

Defendant contends the jury's verdict is a compromise verdict so it must be set aside. "A compromise verdict is one in which the jury answers the issues without regard to the pleadings, evidence, contentions of the parties or instructions of the court. The dollar amount of the verdict alone is insufficient to set aside the verdict as being an unlawful compromise." Smith , 213 N.C. App. at 195, 712 S.E.2d at 721 (citations and quotation marks omitted).

Where it appears that the verdict was the result of a compromise, such error taints the entire verdict and requires a new trial as to all of the issues in the case. If the award of damages to the plaintiff is grossly inadequate, so as to indicate that the jury was actuated by bias or prejudice, or that the verdict was a compromise, the court must set aside the verdict in its entirety and award a new trial on all issues.

Robertson v. Stanley , 285 N.C. 561, 569, 206 S.E.2d 190, 195-96 (1974) (citation and quotation marks omitted).

Defendant argues that the verdict here is a compromise verdict much like an example noted...