Kamalnath v. Mercy Memorial Hosp. Corp.

Decision Date15 June 1992
Docket NumberDocket No. 128108
Citation487 N.W.2d 499,194 Mich.App. 543
PartiesJacintha F. KAMALNATH, and Prakash J. Kamalnath, individually and as next friend of Anthea J. Kamalnath, Plaintiffs-Appellants, v. MERCY MEMORIAL HOSPITAL CORP., Defendant-Appellee.
CourtCourt of Appeal of Michigan — District of US

Hooper, Hathaway, Price, Beuche & Wallace, by David J. Hutchinson, Ann Arbor, for plaintiffs.

Kitch, Saurbier, Drutchas, Wagner & Kenney, P.C. by William A. Tanoury, Susan Healy Zitterman and Linda M. Garbarino, Detroit, for defendant.



Plaintiffs appeal a grant of summary disposition of their complaint of breach of contract, wrongful discharge, employment discrimination, fraud, misrepresentation, and intentional infliction of emotional distress. We affirm.

In 1986, defendant decided to open an outpatient family practice clinic in Petersburg in Monroe County. Defendant retained a recruiter to identify a private family practitioner who brought plaintiff Jacintha Kamalnath and defendant together.

In June 1986, plaintiff, an endocrinologist, first visited the area and discussed the clinic plan with John Iacoangeli, defendant's director of planning and development. Plaintiff was unfamiliar with Monroe County and also lacked experience in the "business" aspects of medical practice. Iacoangeli allegedly stated that the hospital would assist plaintiff with marketing.

On June 20, 1986, Iacoangeli wrote plaintiff as follows:

Thank you for visiting this facility and touring the communities of Monroe and Petersburg on Saturday. As discussed at our meeting, I stated that I would present for your consideration an offer relative to the start-up of a physician office in Petersburg and your retention as a private family practitioner. The following offer is subject to receipt and review of your curriculum vitea [sic].

1. The hospital will provide a net salary guarantee before taxes for one year in an amount not to exceed Sixty Thousand [$60,000] Dollars. The salary guarantee is determined by subtracting office and equipment rental, insurance, including medical liability, salaries, payroll taxes and workers compensation for office staff, office supplies and medical records, dues to medical organizations (AMA, Michigan State Medical Society), fees associated with normal business operations (legal and accounting), and telephone.

2. Underwrite the rental of the physician office for the first year of operation.

3. Provide a Fifty-Thousand [$50,000] Dollar line of credit to be used for operational and professional expenses. The interest rate for using these funds will be seven percent. This line of credit will be available for two years.

4. The hospital will assist you with your relocation costs to a home within Monroe County at a cost not to exceed $1,500.

As I mentioned, the salary guarantee is associated with the primary care aspect of the Petersburg Physician Office. Consultation and other fees associated with your specialty in Endocrinology are separate.

This offer is based on your availability to serve the Petersburg market area as a primary care physician and maintain regular office hours four full days and two half-days a week.

If you have any further questions, please feel free to contact me.

/s/ John R. Iacoangeli

Plaintiff did not accept this written offer. Instead, she suggested various changes and additions, principally an increase in the term from one year to three years and a provision that the hospital handle marketing.

On June 30, 1986, Iacoangeli sent plaintiff a second letter, which provided in part:

It was a pleasure speaking with you again regarding the physician opportunity in Petersburg. As I mentioned, the following revisions to my June 20 letter, are outlined as follows:

1. The net salary-guarantee before taxes in an amount not to exceed Sixty Thousand [$60,000] dollars will be offered for three years, subject to an annual performance review.

2. In addition to those expenses that are subtracted from gross receipts as outlined previously, medical education relating to primary care has been added.

3. Cost of relocation will be increased to a cost not to exceed $2,750.

4. The hospital administration will assist in providing coverage for the office when you are on vacation.

Also, I have enclosed an application for appointment to the Medical Staff. Please complete this as soon as possible....

Defendant subsequently prepared several drafts of a proposed contract, but none of them proved satisfactory to plaintiff, who testified: "[T]here were so many things that was [sic] not acceptable, I saw it [the contract] as not acceptable and that's the whole thing."

Plaintiff, however, moved to Petersburg and began work, although she had no signed contract and the clinic was not yet completed. Various problems then developed with equipping and staffing the clinic. Defendant allegedly did not provide promised equipment, office staff, and advertising and did not timely bill the patients. In addition, although the hospital arranged a line of credit, plaintiff allegedly was not informed that the "line of credit" was actually a personal loan. 1

The Petersburg clinic was not as successful as the parties had hoped. Relations between them deteriorated. A white male physician, who is allegedly less qualified than plaintiff, was added to the clinic staff. In November 1987, defendant formally notified plaintiff to vacate the clinic after a breakdown in their relationship.

In early 1988, plaintiff filed suit, claiming breach of contract, wrongful discharge sex and race discrimination in employment, fraud and misrepresentation, negligent misrepresentation, and intentional infliction of emotional distress. Defendant sought summary disposition pursuant to MCR 2.116(C)(8) and (10), asserting that the statute of frauds barred plaintiff's contract claim, that plaintiff's sex and race discrimination claims had no factual basis, that the alleged fraud and misrepresentation involved matters of opinion and future promises, that the claim of intentional infliction of emotional distress lacked any basis, and that plaintiff was an independent contractor who could not sue for wrongful discharge. The motion was supported by a detailed affidavit from John Iacoangeli.

Plaintiff's response brief lacked any citations to authority. The support filed by plaintiff's counsel consisted of an "Affidavit of Unavailability of Affidavits," the material portions of which read:

2. The Motion was filed while I was on vacation, and my schedule did not permit me to have the necessary communications with potential witnesses that would have been necessary prerequisites to the preparation of specific affidavits.

3. The persons from whom affidavits might have been obtained would include Plaintiffs, who would have been able to support everything contained in the Complaint, as well as the testimony of Dr. Omana Menon relating to damages, the testimony of Dr. Bruce Feyz and Dr. Amba Krishnan regarding the discrimination claim. 2

The court granted defendant's motion, finding that the June 20 and June 30, 1986, letters were mere offers outside the statute of frauds, that plaintiff was not defendant's employee, that no genuine issue of fact existed as to the discrimination claims, that the fraud and misrepresentation claims involved promises and matters of opinion with no evidence of intent to deceive, and that no "outrageous conduct" supported plaintiff's claim of intentional infliction of emotional distress.

Plaintiff sought rehearing, rearguing her earlier points and newly claiming promissory and equitable estoppel. She also sought for the first time recovery in quantum meruit. The court denied the motion for rehearing.

I. There was no Enforceable Contract Between the Parties.

It is hornbook law that a valid contract requires a "meeting of the minds" on all the essential terms.

In order to form a valid contract, there must be a meeting of the minds on all the material facts. A meeting of the minds is judged by an objective standard, looking to the express words of the parties and their visible acts, not their subjective states of mind. [Stanton v. Dachille, 186 Mich.App. 247, 256, 463 N.W.2d 479 (1990), citing Heritage Broadcasting Co. v. Wilson Communications, Inc., 170 Mich.App. 812, 818, 428 N.W.2d 784 (1988).]

"Meeting of the minds" is a figure of speech for mutual assent. Goldman v. Century Ins. Co., 354 Mich. 528, 534, 93 N.W.2d 240 (1958). See also, e.g., Stark v. Kent Products, Inc., 62 Mich.App. 546, 548, 233 N.W.2d 643 (1975).

An offer is a unilateral declaration of intention, and is not a contract. Western Michigan Univ. Bd. of Trustees v. Slavin, 381 Mich. 23, 31, 158 N.W.2d 884 (1968); Eastern Michigan Univ. Bd. of Control v. Burgess, 45 Mich.App. 183, 187, 206 N.W.2d 256 (1973). A contract is made when both parties have executed or accepted it, and not before. Brown v. Considine, 108 Mich.App. 504, 507, 310 N.W.2d 441 (1981), citing Holder v. Aultman, Miller & Co., 169 U.S. 81, 89, 18 S.Ct. 269, 42 L.Ed. 669 (1898). A counter proposition is not an acceptance. Harper Bldg. Co. v. Kaplan, 332 Mich. 651, 655, 52 N.W.2d 536 (1952). Mere discussions and negotiation, including unaccepted offers, cannot be a substitute for the formal requirements of a contract. Kirchhoff v. Morris, 282 Mich. 90, 95, 275 N.W. 778 (1937).

A mere expression of intention does not make a binding contract, Hammel v. Foor, 359 Mich. 392, 400, 102 N.W.2d 196 (1960):

The burden is on plaintiffs to show the existence of the contract sought to be enforced, and no presumption will be indulged in favor of the execution of a contract since, regardless of the equities in a case, the court cannot make a contract for the parties when none exists.

In this case, the parties did not have a sufficient ...

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