Martin v. Trinity Hosp.

• Decision Date: 23 September 2008
• Docket Number: No. 20070329.,20070329.
• Citation: 755 N.W.2d 900,2008 ND 176
• Parties: Dr. Larry MARTIN, Plaintiff, Appellant and Cross-Appellee v. TRINITY HOSPITAL, Defendant, Appellee and Cross-Appellant.
• Court: North Dakota Supreme Court

755 N.W.2d 900

2008 ND 176

Dr. Larry MARTIN, Plaintiff, Appellant and Cross-Appellee v. TRINITY HOSPITAL, Defendant, Appellee and Cross-Appellant.

No. 20070329.

Supreme Court of North Dakota.

September 23, 2008.

Lynn M. Boughey, Boughey Law Firm, Bismarck, N.D., for plaintiff, appellant and cross-appellee.

Matthew H. Olson, Pringle & Herigstad, P.C., Minot, N.D., for defendant, appellee and cross-appellant.

MARING, Justice.

[¶ 1] Larry Martin appeals from a district court judgment dismissing his action against Trinity Hospital ("Trinity") for breach of an employment contract, and Trinity cross-appeals. We reverse and remand for further proceedings limited strictly to whether Trinity breached a contract of employment and whether, as a result of the breach, Martin is entitled to an additional month of severance pay.

I

[¶ 2] In December 1995, Trinity hired Martin, an audiologist, to start an audiology department at the hospital. The parties entered into a written contract for a two-year term of employment. Under the 1995 contract, Martin's base salary was $50,000 annually, with a production bonus of 40 percent of net cash receipts in excess of $75,000 the first year of the contract and 40 percent of the net cash receipts in excess of $80,000 the second year. When the contract expired, Martin continued running the audiology department and received the same annual salary and production bonuses. The parties continued in this manner, without a written employment agreement, from 1997 until 2001.

[¶ 3] In 2001, the parties discussed changing the terms of Martin's employment. On March 5, 2001, the parties entered into a written employment agreement for a two-year term, commencing March 1, 2001, with Martin to receive an annual salary of $55,000 plus a production bonus of 40 percent of net cash receipts in excess of $90,000 during each year of the contract. The contract specified that either party could terminate the agreement upon 60 days prior written notice.

[¶ 4] Through February 2003, Trinity provided monthly financial statements to Martin detailing receipts and expenses for the audiology department. When Trinity ceased providing the monthly statements, Martin made several inquiries but did not receive what he considered a satisfactory explanation of Trinity's discontinuation of the monthly statements. Finally, on December 4, 2003, Trinity advised Martin that his position was being eliminated. Martin was given one month of severance pay in the amount of $4,583, one-twelfth of his $55,000 annual salary. He did not receive any production bonus for the months of March through December 2003.

[¶ 5] In May 2006, Martin sued Trinity for breach of his employment contract, seeking his production bonus for 2003 and an additional $4,583 in severance pay. Trinity moved for summary judgment, arguing the 2001 contract had expired on February 28, 2003, and Trinity therefore did not owe Martin a production bonus after that date and had not breached the contract. The district court denied Trinity's motion for summary judgment.

[¶ 6] In March 2007, the district court, after conducting a scheduling hearing, issued an order requiring: (1) that Martin complete all written discovery on fact issues by April 30, 2007, and all written discovery on expert reports by June 30, 2007; (2) that Trinity complete all written discovery on fact issues by May 31, 2007, and all written discovery on expert reports by July 15, 2007; (3) that Martin complete all depositions of fact witnesses and experts by June 30, 2007; (4) that Trinity complete all fact witness depositions by June 30, 2007, and all expert witness depositions by July 31, 2007; and (5) that each party submit a final pretrial statement, including a final witness list and final exhibit list, by August 13, 2007.

[¶ 7] In accordance with the scheduling order, Trinity's counsel contacted Martin's counsel in April 2007 to schedule a deposition of Martin. Martin's counsel informed Trinity that Martin would not be available during the school year, but did not provide Trinity with any alternate dates when Martin would be available. In May 2007, Trinity again asked for available dates to take Martin's deposition, and again Martin's counsel failed to provide any available dates.

[¶ 8] On May 9, 2007, Trinity served interrogatories on Martin. When Martin failed to timely submit answers to the interrogatories or request an extension of time, Trinity's counsel sent a July 9, 2007, letter requesting answers to the interrogatories and advising Martin that Trinity would schedule his deposition for August 7, 2007, unless Martin provided an alternate date. Martin's attorney responded by letter dated July 10, 2007, in which he: (1) requested an extension of time to submit answers to the interrogatories; (2) noted that the time for Trinity to depose Martin had expired on June 30, 2007, but suggested all discovery be extended to August 20, 2007; (3) suggested alternate dates for depositions; and (4) indicated that, if Trinity deposed Martin, he would "need to depose the individuals in Trinity that have knowledge in regards to this matter." On July 11, 2007, Trinity served a notice to take Martin's deposition on August 14, 2007, one of the dates suggested by Martin's attorney in his July 10 letter. Also on July 11, 2007, Trinity's attorney wrote to Martin's attorney agreeing to an extension of time to file answers to interrogatories but challenging Martin's attorney's assertion that Trinity had missed the deadline for depositions, noting that Trinity had extended professional courtesy and attempted to accommodate the schedules of Martin and his attorney when setting Martin's deposition. On August 3, 2007, Martin's attorney sought to schedule a deposition of Trinity's records custodian for the same day as Martin's deposition. Trinity's counsel advised Martin that the discovery deadline had passed and he would not agree to the deposition.

[¶ 9] On August 8, 2007, Martin filed a motion for a protective order, arguing the discovery deadline had passed. He therefore requested an order prohibiting the deposition of Martin except upon mutual agreement of the parties. On August 9, 2007, Martin finally served answers to the interrogatories. That same day Trinity filed a motion to compel discovery, arguing Martin's answers to the interrogatories were incomplete. Trinity also objected to Martin's attempt to schedule a deposition of Trinity's records custodian. While the discovery motions were pending, Martin traveled to North Dakota from Oregon and Trinity deposed him on August 14, 2007.

[¶ 10] The district court subsequently issued its order on the discovery motions, ordering Martin to provide more complete answers to interrogatories regarding his calculation of the damages he alleged he was owed. On the issue of the disputed depositions, the court concluded:

The Court has no information before it to know whether either, both, or none of the recently scheduled depositions have taken place. Either party may renew their motions with regard to these depositions by providing additional information.

The court in its order also sternly chastised Martin's counsel:

Lastly, Martin would be advised that he is playing with fire by his cavalier attitude toward the rules. The rules contemplate full and fair disclosure. The Court has broad discretion with regard to the imposition of sanction[s] against a party who plays fast and loose with those rules. Trial by ambush will not be condoned, nor does the Court intend to hold a jury for hours on end while counsel conducts courtroom discovery which should have been completed in the more than 15 months since this action was filed. If at trial it appears that Martin attempts to introduce into evidence anything that should have been produced in discovery but was not, upon request of Trinity the Court will fashion the appropriate sanction which could, at the extreme, constitute a dismissal of part, or all of Martin's claims.

[¶ 11] A jury trial was scheduled to begin on Monday, September 10, 2007. On August 31, 2007, the Friday before the Labor Day holiday weekend, Martin's attorney sent to Trinity's attorney eight separate subpoenas directed to Trinity and various employees, doctors, and officers, ordering them to appear at the trial and produce certain enumerated evidence. The subpoenas sought production of twenty-nine separate categories of documents, some dating back more than ten years. Trinity objected to the subpoenas, and the district court ordered that they be quashed.

[¶ 12] Because Martin had failed to submit a pretrial list of witnesses or exhibits as required by the court's scheduling order, Trinity at the outset of trial moved to preclude Martin from calling any witnesses or offering any exhibits at trial. The court ordered Martin would be permitted to testify and his two written employment contracts could be offered as exhibits, but no other witnesses or exhibits would be allowed.

[¶ 13] Because Martin had conducted no discovery and had not obtained records showing his actual cash receipts after February 2003, he could not produce evidence of the actual figures which would have been used to calculate his production bonus after that date. Instead, Martin testified at trial that the last two monthly financial reports he received, for January and February 2003, showed gross receipts of $37,346 and $54,909, respectively. He explained the January number was lower because he had been out of the country on a medical mission a few months earlier, and that the February number was representative of what his average monthly gross receipts would have been for the rest of 2003. Martin thus used a monthly figure of $50,000 in gross receipts to estimate his receipts for the remainder of the year, and estimated deductions for cost of goods and returns by extrapolating quarterly numbers from an earlier period to calculate the estimated production bonus he claimed he...